Who’s afraid of Hollywood? Not RCS Video, Italy’s fast-rising entertainment company and a 12% shareholder in Carolco. Far from backing out of a risky situation, the country’s No. 2 video distribbery says it has every intention of expanding its involvement in U.S. film production.

Despite the unimpressive U.S. and U.K. revenues of RCS’s first investment in a big-budget, English-lingo film, “Chaplin,” and the economic strain of owning an indie struggling for survival, RCS CEO Paolo Glisenti is very happy about the film’s three Oscar nominations. RCS directly put up 30% of the pic’s budget, beyond its contribution through Carolco. It also put up 5% of the upcoming Sylvester Stallone vehicle “Cliffhanger,” the costs of which soared over $ 70 million.

With such investments, RCS gets access to top indie product and talent. Both are needed to fuel Italian TV sales, its homevid portfolio and the international distribution pipeline of sister company, Majestic Film & Television Intl.

RCS’s reach into offshore production really began last April, when it bought 70% of the London-based foreign sales company Majestic and the marketing experience of its CEO, Guy East. It was a carefully plotted move aimed at driving a wedge into overseas talent pools.

“Majestic put us in the middle of an international circle,” said Glisenti. “We’re starting to enjoy the benefits of sharing its visibility.”

However, many have a hard time understanding RCS’s reasoning behind the Carolco buy-in and its persistence in sticking with the troubled indie. (The original ante for 3.6% of Carolco cost RCS $ 40 million in May 1991.)

There can be no doubt that Carolco has taken a heavy toll on RCS Video. However, turnover rose from $ 58 million in 1991 to $ 120 million in 1992, allowing the company to “substantially balance its budget” last year.

Italian investment analysts accuse RCS of not being cautious in its Carolco investment. But they recognize the company has little alternative to investing abroad: It has no Italian TV network of its ownand must seek foreign outlets for product.

On the upside, if Carolco continues producing films that click, such as “Basic Instinct,” RCS will also benefit. It has established firm ties with other Carolco backers Canal Plus and Pioneer.

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