PARIS (Reuters) - Like one of the moody, enigmatic heroes in which it specializes, French cinema is going through a period of crisis and introspection just as it prepares to celebrate one of its greatest triumphs.
The runaway success of "Bienvenue chez les Ch'tis," an amiable comedy about a damp and unglamorous northern province, is expected to be crowned in the coming days when it takes the title of the most popular film ever shown in France.
The film, made for just 11 million euros ($17.15 million), has already claimed the box office record for a French film and is poised to overtake the Hollywood superproduction "Titanic's" record of more than 20 million viewers in France.
With Marion Cotillard claiming France's first best actress Oscar in almost 50 years for her performance as chanteuse Edith Piaf in "La Vie en Rose" and a string of popular local romances and comedies in movie theatres, the industry should be buoyant.
But away from the commercial giants like Pathe, producer of "Bienvenue chez les Ch'tis" and owner of France's biggest chain of multiplex cinemas, the mood is somber.
Some independent film makers say the growing dominance of a handful of distributors and weakening state support threatens the future of the smaller "films d'auteur" that have been the hallmark of French cinema since the days of Francois Truffaut and Jean-Luc Godard.
"Cinema is going through a deeply troubled period of worry and self questioning," said an article in this month's Cahiers du Cinema, the highbrow bible of arthouse films and birthplace of the "New Wave" of French cinema in the 1960s.
It said the industry's problems had reached a level not seen in at least 25 years and noted: "The whole system of public support for cinema is in crisis."
Pascale Ferran, director of "Lady Chatterley," a French version of D.H. Lawrence's classic, recently presented a 194-page report warning of the threat to films that were neither big budget blockbusters nor tiny avant-garde art productions.
The report said these "films du milieu" -- mid-budget films with both artistic ambition and public appeal -- were threatened by the focus of television broadcasters that fund many films on fixed formulas and by the dominance of big multiplex chains.
"For some time now, we have been witnessing a slide away from a logic of film to a logic of business," the report says.
Margaret Menegoz, president of Unifrance, the body that promotes French cinema abroad, said she sympathized with parts of the report but was skeptical about the question of funding and said the arthouse sector remained the mainstay of exports.
"I don't think the success of a film is tied to its budget," she said. "A film has to be well made and catch a mood but the public couldn't care less what it costs to make."
In terms of pure numbers, the industry appears to be doing well, backed by rising investment from television broadcasters like Canal Plus and TPS.
The National Centre for Cinematography said 185 local productions were approved last year and investment in French films passed one billion euros for the first time.
Fuelled by "Bienvenue chez les Ch'tis," attendance in French cinemas rose 17.8 percent in the first three months of the year to 61.75 million entries, with local films enjoying market share of 63.7 percent against 56.5 percent a year earlier, it said.
But the change in climate is perhaps summed up by the fate of the Cahiers du Cinema, which provided the launching pad for Truffaut's later career as a director but which is now up for sale by its publisher, the newspaper group le Monde.
Editing by Paul Casciato