Art-house may help UIP regain waiver

Date: 04/02/1999

By Peter Chapman

HOLLYWOOD-owned cinema distribution venture United International Pictures has announced plans to launch a new art-house film network, in a move which could help it regain a controversial exemption from EU anti-trust rules.

The scheme addresses one of the key criticisms aimed at the alliance between Hollywood studios Paramount Pictures, Metro-Goldwyn-Mayer and Universal. The grouping is seeking an extension to its last waiver from EU anti-trust rules, which officially expired in 1993 but remained in force pending a formal decision on its future.

UIP has long been attacked by European critics for failing to invest heavily enough in distributing local or minority interest films. They accused the alliance of exploiting its exemption to impose Hollywood blockbusters on the EU market on terms which would normally be outlawed by competition rules.

UIP's anti-trust waiver was only granted in the 1980s, because the EU's own industry was in turmoil and ventures such as UIP promised to distribute more films, more effectively.

The move announced by the alliance late last month will see UIP begin to release "more difficult titles", with less mass appeal than the traditional blockbusters, through a series of specialist units. These could be minority-interest US or European films for which UIP had acquired the rights. The first unit will be based in the UK, but others are planned for Germany, France and Japan later this year, with the possibility of yet more to come.

The initiative comes after the European Commission held hearings with UIP executives and other movie industry personalities last September to consider the alliance's bid for an extension. The venture had called for the chance to argue its case after Competition Commissioner Karel van Miert said that he saw no reason to renew the exemption.

The Commission was originally expected to deliver its final decision soon after those hearings, but a spokesman for Van Miert said a ruling was not expected for some weeks, indicating that UIP might still have something to play for.

EU movie industry experts concede that the alliance's latest move may win it more friends. But they insist that the institution should not make UIP investment in local minority films a criterion for renewing the waiver, warning that this might squeeze EU firms out of the market.