Meet the French directors bemoaning the Gallic film boom

French directors claim film subsidies are killing their industry, and the Gallic soul is missing from the screen. So why is the box office booming, asks John Lichfield

The French cinema industry is booming – or so it seems. French cinema, as an art form, is struggling – or so we are told. A paradox? Yes, but all facts and arguments about the French movie industry, the only full-service movie industry in Europe, are confusing. The arguments always seem to be in black and white. The reality is usually a muddy technicolour.

First, a landmark. A pleasant, mildly funny but mediocre movie, Bienvenue Chez les Ch'tis, has just become the most successful French film of all time. In seven weeks, it has overtaken the highest-ever attendance for a French film in France – 17,000,000 derrières sur sièges – set in 1966 by a comedy classic, La Grande Vadrouille.

Bienvenue Chez Les Ch'tis is a cheerful, cliché-ridden, underscripted attempt to reverse French prejudices about the climate, people and dialect ("Ch'ti") of the French Far North. Dany Boon, its main writer, director and co-star, is a stand-up comedian turned actor and film-maker. The movie is a five-minute sketch that goes on for 106 minutes.

M. Boon is a lovely man and deserves his success. He has tapped in to the same vein of French sentimentalism that made unexpected triumphs in recent years of the movies Amélie and Les Choristes. However, both of those were rather good films.

The triumph of the Ch'tis owes something to diehard French provincial pride. Even if you are not a northerner, you can identify with the wily, good-hearted "Ch'tis" who demolish the prejudices of the visitor from the Deep South. A classic the film is not. It does not deserve to be considered alongside La Grande Vadrouille, a sort of French 'Allo, 'Allo! in which two of the greatest of French screen comedians, Bourvil and Louis de Funès, help a trio of shot-down RAF airmen to escape from wartime France.

And the triumph of the Ch'tis, now showing at two cinemas in London, draws attention to the rude apparent health of cinema across the Channel. The French film industry produced 227 films last year – three times the number of titles made in Britain, or one movie for every two made in Hollywood.

Investment in French films – both venture capital and public subsidies – reached €1.2bn in 2007. French films attracted more than one in three of all French cinema-goers, a level which looks certain to be smashed this year.

France subsidises its film-making through a tax on movie tickets and a levy on the turnover of TV companies. One-quarter of the money invested in new films last year – €270m – came from the public purse.

The recent annual report of the Centre National de la Cinématographie (CNC), the body which manages the subsidies, glowed with self-congratulation. Not only was production booming, French film-makers were not travelling abroad so often to make their movies in cheaper countries.

So, all is well with the French movie industry? Not really.

An independent report published recently by a group of movie professionals ("The Club of 13") protested that the public cash was being lavished on commercial block-busters (which did not really need it) or first-shot, experimental art movies (which frequently did not deserve it).

Middling budget projects that had a chance of being both good and popular were being squeezed out, the report said.

More than half the films made in France are first or second efforts by their directors. Of the 200-plus films made each year, 150 are watched by fewer than 100,000 cinema-goers each. Two per cent of the cost of such films is generated by the box-office. The rest comes mostly from public subsidy.

France created a reputation as a forcing-ground for original and experimental cinema – or films d'auteur – with the New Wave movement. A half-century later, the notion persists abroad that the French cinema-going public likes "difficult" and "obscure" movies. This is nonsense. The success of the Ch'tis is proof of that.

A French internet chat-room this week produced the following priceless comment, typical of the viewpoint of the ordinary French cinema fan: "I really love the French cinema when it makes quality, popular films but I hate it when all it shows is a slice of bourgeois life in Paris for which I care nothing... OK to subsidies for the French cinema, but not if it means handing over cash to the children of the rich to tell us life-stories which are boring enough to make you die shitting."

All the same, the CNC, which controls the subsidies, feels obliged to support young and low-budget movie-makers. The CNC also feels obliged to pour money into big commercial projects that will sustain France's movie-making infrastructure.

The result, says the Club of 13, is a few Hollywood-imitating or TV-pleasing, bland, big-budget movies and a morass of wannabe-artistic dross that no one watches. Middle-budget movies by experienced film-makers, who have something original but not dotty to say, find it difficult to obtain finance or a proper run on the cinema circuit. The large TV companies, which supply so much of the subsidy for film-making, demand simplistic movies with star names to guarantee big audiences when the films finally reach prime time on the box.

There is another perverse effect of the subsidy system, the Club points out. The making of so many low-budget films with public cash gives plenty of work to French film technicians and pushes up their wages, so big and middle-budget movies are forced to go abroad to save money.

Even when middle-budget, intelligent movies are made, the Club complains, they are given inadequate cinema time before they are bounced out by French or US blockbusters. The result, says the Club of 13, is that – a half century on from the New Wave – French cinema is artistically drowning.

Take, for example, the two movies that won the main César, in the French version of the Oscars in the last two years. In 2008 (for films made last year), the prize for best movie went to La Graine et Le Mulet, a beautifully made, agonising black comedy about thwarted ambition in the North African immigrant community in the south of France. The film, directed by Abelatif Kechiche, has won prizes everywhere it has been shown. It has managed a creditable 700,000 entries at the French box-office – about one-24th of the Ch'tis.

In 2007, the prize went to the sometimes moving, occasionally silly Lady Chatterley. It failed to make a breakthrough in the French box-office. Its director was Pascale Ferran, who is also president of the Club of 13.

She says that her movie would have been more succesful if it had been properly promoted and allowed more cinema time. Her critics say that her own movie, and La Graine et Le Mulet disprove her arguments. Intelligent, mid-budget films are still made in France (even if a depressingly small number of people want to watch them).

These closed-loop arguments have been going on as long as the subsidy system, which began in 1948 and adopted its present form in 1959. The Club of 13 has some good points, but its suggestions for reform of the French cinema subsidies are rather alarming.

The Club wants another tax, this time on popcorn and soft-drinks sold in cinemas. It wants to make sure that a bigger share of the public cash goes to film writers, who are the first stage of innovation and creativity; fair enough. It also suggests that any film that attracts more than two million viewers should be stripped of its subsidies. Any film that attracts less than a million should have its subsidies topped up.

In other words, according to the Club of 13, the system should reward failure and punish success. It is hard to see how that would improve the quality of French movies.

The truth of the matter is a muddle and will always be a muddle. Subsidies are a very bad system, but they are better than no subsidies at all.

France, unlike the rest of Europe, has preserved a proper movie industry, capable of making comedies and thrillers, costume movies and biopics, good movies and awful movies. Any attempt to subsidise something as chaotic and creative and international as movie-making is bound to create jealousies and confusions and anomalies.

The Club of 13 is probably right that the "middling" French movie deserves more funding and more cinema-time. But their report has failed to come up with a convincing "pitch" for how the subsidy script could be re-written.