This month, Potsdam, Germany plays host to the second Cartoon Movie, an event at which roughly 40 European animated feature projects will be pitched to prospective financiers from across the continent.

Around the fringes of this frantic search for budgetary contributions, Cartoon Movie’s 250 delegates will debate the state of the European market in a series of conference seminars-and they may find limited cause for optimism.

Although Europe’s exhibitors and retailers are still very much in the grip of Disney’s heavily supported blockbusters-typified this year by the rollout of Toy Story 2-there are heartening signs that homegrown features can find an audience in their local markets.

After the success of German movies like Das Kleine Arschloch (Little Asshole) and Werner I and II (which, between them, sold a combined eight million tickets at domestic box office), Germany’s public turned out in force for the launch of Werner III in fall 1999. Distributed by Neue Constantin, the film attracted 2.1 million admissions.

Another much anticipated German feature Tobias Totz and his Lion, produced by RTV Family Entertainment and German broadcaster SWR and distributed by Warner Bros., achieved 100,000 admissions in its first weekend last fall.

In France, Les Armateurs/Odec Kid Cartoon’s Kirikou et la Sorcière (from director Michel Ocelot), distributed by Cecchi Gori, led the pack by securing a million cinema-goers, 400,000 video sales and 100,000 DVD sales. Steve Walsh’s Le Ch‰teau des Singes (A Monkey’s Tale) from La Fabrique/Les Films du Triangle, distributed in France by MK2 and in the U.K. by Miracle Communications, scored just over 100,000 admissions in a five-week run. In the U.K., it has done the seemingly impossible by securing widespread release from the end of May. Ellipsanime’s Babar, co-produced by Nelvana and distributed by TMO in Germany, also sold 145,016 tickets last year.

Thanks to a combination of factors, France and Germany are the two most favorable markets for home-grown animated features. However, other territories have shown some signs that a breakthrough may be possible.

In Italy, La Lanterna Magica’s La Gabbianella e il Gatto (directed by Enzo d’Alo and distributed by Cecchi Gori) made it into the top 10 at the Italian box office. Its 1.2 million admissions made it more successful than Disney’s Mulan and DreamWorks’ The Prince of Egypt, and BAC Films is now planning to distribute the film in France.

In the U.K., there is also strong backing for The Illuminated Film Company’s Christmas Carols, which was pitched at Cartoon last year. No distributors have been lined up yet.

Bristol-based Aardman Animations has also suggested a route forward for Europe by signing a four-film deal with U.S. studio DreamWorks. The arrangement, which could keep Aardman in movies for the next decade, kicks off this summer with the launch of Chicken Run in the U.K. and U.S. Chicken Run is distributed in the U.K. and Europe by Pathé, while DreamWorks handles distribution in the rest of the world.

Steve Walsh had to draw on 26 separate sources of money to get the US$10-million A Monkey’s Tale made, but that wasn’t the hard bit. The real challenge was securing distribution in the notoriously tough U.K. market. ‘A lot of people who produce animated films are from TV backgrounds,’ he says. ‘So most of them are used to delivering a show and letting the broadcaster schedule and promote it. With a movie, you’ve got to get involved in the marketing, or you only have yourself to blame if it doesn’t work.’

The primary problem for U.K. animators is that movie distributors are not prepared to back films that don’t emanate from a major studio. ‘It’s hard to convince a distributor or exhibitor to back you when a company like Disney has tied up all the promotional support from retailers,’ says Walsh.

The situation is different in other parts of Europe for a variety of reasons. In France, for example, there are more independent distributors, cinema screens and life-saving subsidies. In Germany, producers can get subsidies for theatrically released movies that are not available for TV movies. This has led to a number of decidedly average feature films.

It is no accident that of the 40 projects at Cartoon Movie, many derive from markets where there are subsidies for movies: 13 are from France, four from Germany and, amazingly, five are from Denmark. These include the popular Help I’m a Fish from A Film, which is budgeted at around US$8 million. No distributor has signed on yet.

Spain is also well represented, but the U.K., which would play a significant part in any TV animation forum, has only two active participants: Siriol Films and Silver Fox.

Siriol’s managing director Robin Lyons took a US$6.5-million project called Piper’s Mountain to Cartoon Movie last year, but has yet to raise the necessary finances to make it. He is still hopeful about finding the budget, and he found the event ‘an enlightening but depressing experience.’ His conclusion was that ‘if you want to make animated movies in Europe, you need to think in terms of niche films aimed at domestic audiences.’ So this year, he is coming back with a fantasy concept called 360 from Tony Johnson, creator of Fallen Angel, a production for Fuji TV that’s distributed by ITEL. Johnson’s looking for a relatively modest US$1.6 million.

Part of Cartoon Movie’s role will be to persuade delegates that movies can cross borders, and to some extent this is true. A Monkey’s Tale, Kirikou and La Gabbianella have all secured distribution in more than one market. But Cinar Europe president David Ferguson is not convinced that European animated features travel very well. ‘Maybe you can achieve something that will work across France, Spain and Italy, but the German films don’t travel too well.’

Some years ago, Ferguson managed to get an US$11-million version of Pippi Longstocking off the ground (produced by Nelvana and distributed in Germany by Beta Taurus). It did well in Germany, okay in Scandinavia ‘and you’ll probably never see it in the U.K.’ If you really want something to travel, then you’re best off talking to the U.S. majors about it, says Ferguson. ‘Other than that, try to keep the budget down to US$6 million and make sure you have a distribution commitment before you begin.’

As Cinar boss, Ferguson has looked at a movie version of classic The Princess and the Pea fairy tale, but the numbers didn’t add up. One route he believes can work is the production of a 26 x 30-minute series and a movie at the same time. ‘It’s still an expensive exercise, but there are economies of scale to be had.’

Siriol’s Lyons instinctively rejects the idea of teaming up with U.S. studios. He does not want to pursue a path that might see creative control wrested away from his studio. But Aardman Animations director of development and executive producer of Chicken Run Michael Rose disagrees: ‘We wanted access to Hollywood’s marketing, distribution and development firepower. So much effort goes into making these films that we didn’t want them to disappear into arthouse cinemas or straight to video. We want them alongside the likes of Toy Story 2.’

DreamWorks suited Aardman perfectly. ‘Getting into film-making was a big leap for us, so we really do value their input on storytelling, structure and pace, as well as the security they provide,’ says Rose, adding, ‘They have also allowed us to keep our production base in Bristol.’

Aardman, with two Oscars and the involvement from day one of Jake Eberts (who produced Dances with Wolves), is not a typical European animation house, but Rose would like to see Europeans open up more to the U.S. ‘The U.S. players are potentially useful partners and should be at Cartoon Movie. We ought to be confident enough to expose our skills to the world market,’ he says.

Though some observers doubt that toon movies will lend themselves to co-production in the same way as TV productions, some upcoming films have managed to win cross-border support.

Les Armateurs is preparing US$1.5-million Les Triplettes de Belville with backing from Canal +, France 3 Cinema and Diaphana as distributor. (Not to be confused with Cromosoma’s The Triplets: Triple Somersault also at Cartoon Movie). Meanwhile, Ellipsanime has pulled together France 2 Cinema, RAI, Hast (Japan) and Neurones to back the movie and television series of Corto Maltese en Sibérie.

Film producer/distributor Alan Rudoff attended Cartoon Movie last year and gave a harsh but fair assessment of the Euro animated feature market. He says there have been hopeful signs in the last year, but he still believes the market needs to be realistic about the limited potential of its output. ‘Kirikou is a beautifully crafted French success, but it is unlikely to get released in the U.K. or the U.S.’ Rudoff believes that ‘producers should ask themselves the brutal questions before they start production-not halfway through. For example, should they really be aiming for theatrical releases when there are perfectly good alternative distribution strategies such as direct-to-video?’

Cartoon Movie organizers feel that the event will be significant and that any initiative to drive local production should be welcomed.

Walsh welcomes Cartoon Movie, but is not convinced that so many ideas should be on display. ‘The event needs to stress the quality of proposals, not the quantity. A lot of people put three episodes of a TV show together and call it a film, but that’s not how it works.’