A new European Audiovisual Observatory report says UK is reliant on EU and US projects.

The European Audiovisual Observatory (EAO) has published a report on the importance of the European market for the UK film and TV industry.

According to the report the UK audiovisual industry is the leading market in Europe, heading the European industry in terms of size and exports.

The report estimates the revenue generated in Europe by the UK film and TV industry at $5.4bn (£3.3bn) in 2008 and found that UK fiction (TV fiction and films) has better exposure in the schedules of TV channels of other European countries than its European competitors.

According to the report, the gross revenue of the UK AV industry in 2009 narrowly exceeded that of Germany and France and was comfortably higher than Italy and Spain.

France was the biggest releaser of UK films (161) - including incoming investment films like Harry Potter - between 2005-9, with Spain (159) second and Netherlands (135) third, while in the same time UK films attracted their largest share of non-national admissions in France and Germany (21% each).

However, while the UK is the best exporter within the EU, the report claimed that the UK is the most dependent on the European non-national market and was the territory most dominated by US product, with UK productions - including incoming investment films - accounting for 72% of EU admissions outside of national markets in 2009.

The findings complement data collected from the UKFC in January, which showed that inward investment levels for 2010 rose 15%, to $1.5bn (£928.9m) from $1.3bn (£810.7m) in 2009 while at the same time there was an 11% drop in the number of domestic UK films made in 2010 as opposed to 2009 and in 2010.

According to Screen research carried out in January, the lack of high-earning entirely local productions at the UK box office was in sharp contrast to other major European territories. 17 local titles featured among France’s top 50 grossers, 15 home grown productions were among the top 50 in Italy and six made it in Germany, while only one entirely British production – StreetDance 3D – featured among the top 50 performing films in the UK in 2010.

According to the EAO report British TV was also in a strong position in Europe, with British private TV groups accounting for 28.5% of the turnover of the 12 leading European private TV groups in Europe.

Of the 357,195 hours of fiction broadcast by 198 major European channels in 2009, 18,821 (5.3%) were of UK origin. The report singled out the UK as the major European exporter of fiction, with German fiction representing 3.3% and French fiction 2.5%.

While the report acknowledges that the revenues generated by the export of those TV services were difficult to assess with total accuracy, it surmises, based on available data on the turnover of broadcasting companies and number of subscribers, that the TV revenue represents at least $2.1bn (£1.3bn) in 2009, with an average rate of growth of those revenues between 2005 and 2009 an impressive 10%.

The report was published to coincide with the British Screen Advisory Council annual meeting, which took place yesterday in London.

The European Audiovisual Observatory is a public service body comprised of 37 member states and the European Community. It operates within the legal framework of the Council of Europe.