Icelandic film may be riding high creatively (it gets a special focus at this year’s Gothenburg Film Festival), but business is tough, according to Oscar nominee Fridrik Thor Fridriksson.

“We’ve only been making films for three decades, it’s getting worse and worse,” he said at a public conversation about Icelandic cinema in Gothenburg today.

He continued: “The Icelandic Film Centre’s film funding has a 40% cut for next year, it’s the second time [the government] has done that in four years. So the situation is really, really tough now. Especially for directors who are making their first films, it’s almost impossible. They don’t get funding from Nordisk Film & TV Fond and Eurimages. For old guys like me, it’s much easier. I think the government is trying to pull together a new concept about how Icelandic films will be produced in the future.”

Fridriksson bemoaned that sometimes only 1,500 people buy tickets to see Icelandic films at the box office now. “That’s the problem, if there is no screen value in the films, it spreads all over Icelandic films. Last year was the worst year ever compared to the old days when sometimes had half the country seeing the films.”

He said there were about 25 screens in Iceland, down from previous 50. “My theory is the young people, age 16-25, and they are just drugged with action films. And the older people have been scared away from the theatre, you have to watch 20 minutes of trailers…they prefer to watch the film on television.” He compared American films to fast food and said “we are trying to make a decent national dish.”

“We are going to educate our new audiences to see more films,” Of Horses and Men director Benedikt Erlingsson said as a rallying cry. “We can have a new renaissance.”

“There are no production companies who can invest in taking risks anymore, there are only small companies with small overheads,” Fridriksson warned. “The only thing that can make this renaissance is more money. And more money with people that makes film that make money that can invest in more films…when I made Angels of the Unvierse [in 2000], it had four suicides in it, we expected 6,000 people to see the film. And half the nation saw it. We could take that risk, we were well off with our equipment and everything.”

There is some good news in Iceland, however. “One good thing is that filmmakers from Japan to America can come to Iceland to shoot and they get 20% back, that has been keeping people in Iceland, we have three or four big Hollywood productions coming in every year and that’s where people gain craftsmanship and money to survive.” Recent inward-investment shoots include The Secret Life of Walter Mitty, Oblivion, Noah and Interstellar.

Fridriksson added: “As long as the currency is so low, people will come. And you can find endless locations in Iceland. You can shoot almost every country.”

Still, that can present logistical problems for local film-makers. Erlingsson said: “Tom Cruise, Ben Stiller and Russell Crowe were taking all the experienced people and the equipment and they were closing bridges and towns.”

There are advantages to shooting in Iceland’s dramatic landscapes. Fridriksson says he loves shooting in bad weather, particularly. And that the snow and striking nature scenes aren’t something that could even be created by Hollywood’s VFX experts.

Erlingsson added: “It’s the mentality of the small nation or island people, cutlure in essence we have to do it for ourselves. It’s to show somebody else, it’s for us. But the mirror from the media is that something doesn’t have value unless it gets attention from abroad. In our new age of cinema and culture, we are going to change that. It’s not about being nationalist, it’s about value.” He also called for Iceland’s tourist board to help promote feature films because of the benefits to the tourism industry from Icelandic film.