Co-productions arose as a means to enhance collaboration between countries with small, struggling, or ambitious production industries so as to pool resources and compete in an international market with Hollywood cinema. The so-called Film Europe movement in the latter half of the 1920s was the first concerted effort in this regard. By guaranteeing to import each other's films, European film industries could expect higher box-office revenues, which could then be used to increase the production budgets of their films and potentially compete with American films. The German producer Erich Pommer (1889–1966) was at the forefront of the Film Europe movement. As head of Universum Film Aktiengesellschaft (Ufa), the single strongest film firm in Europe, Pommer encouraged the production of big-budget films (e.g. Die Nibelungen [ Siegfried/Kriemhild's Revenge , 1924], Tartüff [ Tartuffe , 1926], Metropolis [1927]), but Germany's market was too limited to recoup the high production costs. His negotiations in 1924 with one of the major French distributors yielded the first bilateral film import deal between two European countries. Over the next four years others followed, and the European film industries, with Germany, France, and Great Britain at the forefront, built the base for a cooperative continental market that slowly reduced the number of American imports and replaced them with European product.

The coming of sound to Europe in 1929 cut Film Europe short, but it also made possible the first wave of international co-productions. National import quotas or bans on foreign-language films in several countries marked sound films from the beginning as a potential threat to national culture and a problem for both the European and American film industries. The latter found it necessary to produce films adapted to national markets in order to satisfy the requirement for films in other languages as well as to avoid import quotas, and it did so by producing multiple language versions, or MLVs. In 1930 American studios began to invest heavily in the European film industry to make MLVs, either by importing Europeans (or, in the case of the Latin American markets, Latin Americans) to Hollywood or by setting up production centers in Europe. The building by Paramount of a studio complex in Joinville near Paris is the most famous of these, in 1930 and 1931 turning out a total of 150 films in as many as 14 languages. Quickly, all the major American studios established similar facilities in Paris, London, and Berlin. The first MLV— Atlantic ( Titanic: Disaster in the Atlantic in the United States)—was not, however, Hollywood produced, but European, a 1929 Anglo-German co-production directed by E. A. Dupont (1891–1956) in English and German at Elstree in England. European MLVs continued to be made throughout the early 1930s ( Die Dreigroschenoper/L'Opéra de quat'sous [ The Threepenny Opera , 1930] and Der Kongreß tanzt/Le Congrèss'amuse [ The Congress Dances , 1931] most notably), though the vast majority were produced under the auspices of Hollywood studios. While MLV production was dropped in the mid-1930s for the cheaper solutions of dubbing or subtitling, it is noteworthy as the first concerted period of international co-production in cinema history.

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