At the beginning of the 1960s the prospects for European cinema looked good. Although audiences were declining, types of cinema were emerging which took account of the new realities. Co-productions reached a broader international market, while the French New Wave showed the way in low-budget film-making which did not need large audiences to cover its costs. By the 1980s, however, the picture was distinctly less rosy. The new cinemas of the 1960s and early 1970s ran out of steam. Cinema audiences declined still further, often vertiginously. Hollywood tightened its grip over the major film markets, and seized an increasing share of dwindling box-office revenues. In many European countries, particularly the smaller ones, the making of home-grown popular films -- comedies, crime films, and other traditional bread-and-butter genres -- dwindled to a trickle, and production became sporadic, sustained by subsidy and the occasional international success. National cinemas in either the economic or the cultural sense-that is to say, cinemas capable of producing a regular crop of films for the national market addressing national cultural concerns -- now exist in only a handful of European countries, west or (since the fall of Communism) east.
As a result, European cinema is increasingly characterized (at the low- and mid-budget levels) as 'art cinema' and (at the upper end) as 'international film'. These categories fairly accurately reflect the situation that has come into being since the 1980s, but the notion of art cinema in particular can be quite misleading when applied retrospectively to European films of earlier periods. Many of the films marketed in Britain and America under the 'art cinema' label, and imagined to be somehow different from 'commercial' films, were in fact (and sometimes still are) mainstream products in their country of origin, enjoying popular success at home before being sold abroad for more restricted 'art-house' release, and the same is true of Japanese and Indian films.
The idea of an 'art film' (or film d'art) occupying an different economic and cultural space from run-of-the-mill commercial production is almost as old as cinema itself. Making films with superior (or at any rate distinctive) artistic qualities could be an industrial strategy for producers and entrepreneurs as well as an aesthetic aim for directors-though both sides often discovered, to their cost, that the two objectives were not necessarily compatible. After 1945, government policy in many countries specifically favoured the making of films that would serve as vehicles of national cultural expression. Though these policies were often ambiguous, both in intention and in effect, they opened up spaces in which non-mainstream film-making could be financially viable, if not a reliable source of profit.
The new art cinema which took shape in Europe in the 1960s was not a homogeneous phenomenon. It comprised the cheaply made and often playful films of the French New Wave and solemn super-productions such as Vis conti 's The Leopard, made in Italy but financed by 20th Century-Fox. Within the New Wave itself, different tendencies emerged. Some directors, such as Jean-Luc Godard, retained a commitment to radical experiment, while others, such as Claude Chabrol, moved increasingly towards the genre film (in Chabrol's case, the Hitchcockinspired thriller). Whichever route directors chose, however, they could find producers to back them, secure in the knowledge that the market was flexible enough to support many different types of film, for both domestic and international release. In Britain market conditions were less favourable. The directors from the 'Free Cinema' stable were more dependent on mainstream releasing; although they enjoyed some international prestige, their main road to success was via America rather than Europe.
The turning-point for European art cinema came in 1959-60, with the release of Truffaut's Les Quatre cents coups, Alain Resnais's Hiroshima mon amour, Godard's Á bout de souffle, Michelangelo Antonioni's L'avventura, and Fellini's La dolce vita. The cultural conditions for the success of this new cinema had been laid in the 1950s, initially through the work of film societies and smallcirculation magazines, and harbingers of the explosion to come could be found in the enthusiastic reception given to films like Ingmar Bergman's The Seventh Seal in 1957. But the popular appeal of the New Wave and associated cinemas was wider, and based less on their properties as 'Art' than on features such as their openness to a variety of experiences and (compared with mainstream British and American cinema, still mired in restrictive censorship codes) their sexual frankness. This appealed in particular to the young, educated audiences which were becoming proportionately more important with demographic and cultural change. Throughout the 1960s it was so-called art cinema which presented rough-hewn narratives, with a real-life inconclusiveness to them, while the mainstream, whether in the product of the major Hollywood studios or the survivors of the French 'quality tradition', offered a well-crafted, artistic product, confectioned for a middle-