In Hollywood studios can ride out commercial flops

Once in a while Britain would turn out a blockbuster or two, such as Gandhi or Chariots of Fire in the early 1980s. But then it took just one flop to threaten to sink the company.

In Hollywood it is a very different story. The major studios add structure and stability to the business. They spread the risk over several films, knowing not every film will be a box office triumph.

In Britain, the Government claims to have woken up to the industry's problems. Last year Culture Secretary Chris Smith announced three new consortia that would share in �92m of Lottery cash. The "mini studios" will be expected to turn out about 30 films each by 2003.

Chris Smith announced funding for three `mini studios'

Lottery money awarded in 1996 resulted in a huge increase in British-made films, from 78 the year before to 128. Ten years before, in 1986, just 41 British pictures were completed.

It has also granted tax breaks to film makers - from Britain or overseas - working in the UK. Chancellor Gordon Brown said these are expected to increase annual investment by �240m a year.

The incentives allow producers to write off tax production costs against films with budgets of up to �15m. Industry insiders would like to see this raised to attract more American blockbusters.

Cash has also been forthcoming from television's Channel 4, which is committed to ploughing �32m into the business in 1999, �5m more than this year.