ROME — In the first tangible sign that Italy’s harsh economic climate is impacting the local entertainment biz, more than 500 Italian industryites have fired off an angry missive to RAI, blasting the pubcaster for slashing its TV production budget by about 40% since 2007.

RAI has slashed its TV fiction coin from $350 million in 2007 to $257 in 2011.

The March 12 open letter was signed by, among others, helmers Marco Bellocchio, Paolo Sorrentino and Gabriele Salvatores. The missive notes that since 2007, RAI has cut an estimated 200 hours of local scripted content (cutting coin for TV fiction from $350 million in 2007 to $257 million in 2011). In total, the letter notes, there has been a 300-hour reduction in domestic TV product over the past four years, including cuts made by Mediaset and satcaster Sky Italia.

“This means that less than 50 shows are being made per year in Italy these days,” the letter states.

Italian TV fiction output is smaller than it was 15 years ago, despite a proliferation of channels. Italy lags well behind the output of the U.K., France and Germany.

Another problem that Italo skeins face is that they don’t travel. According to the most recent figures from Italian TV producers’ org APT, Italy in 2010 imported $523 million worth of skeins, but domestic exports accounted for only $42 million. By contrast, the U.K. TV export biz notched some $2 billion in 2011, according to Brit TV producers org Pact.

The top Italo export is kiddie toon TV series “Winx Club,” followed by Sicily-set “Inspector Montalbano,” which both air locally on RAI, and Sky Italia’s Roman gangster saga “Romanzo Criminale.”

APT prexy Fabiano Fabiani recently proposed that independant producers should be allowed to hold on to rights, instead of always handing them over to broadcasters. “That would prompt them to start producing with an eye on the foreign market and new media platforms,” he said. It’s a solution that would rep a contractual revolution for Italy.

Italo industryites in their appeal also urged RAI to take its cue from the crisis to do away with its “obsolete creative and production models.”

RAI general manager Lorenza Lei, who has been wielding the ax, is also making “new production model” her mantra, though what she means is still unclear.

Lei points out that, besides a roughly 5% drop in RAI’s advertising take last year to $1.2 billion, the pubcaster is plagued by increasing TV-tax evasion (meaning that 27% of viewers are not paying their broadcast license fees), accounting for some $780 million in missing revenues this year.

Creatively, that might mean more daring departures from the mob-themed skeins Italy has been making for decades, such as Mediaset’s anti-Mafia drama “Baciamo le mani,” which will start shooting in April; or RAI’s “I 57 Giorni,” a biopic of anti-Mafia magistrate Paolo Borsellino, which is in its pipeline. Sky is adapting Matteo Garrone’s naturalistic Naples mob pic “Gomorra” for the smallscreen — its own variation on the Mafia trope.

As for investment in local movies, RAI Cinema topper Paolo Del Brocco proudly proclaims that, unlike TV dramas, the theatrical side is stable, with $62 million budgeted for 2012, same as in 2011.

That said, RAI Cinema’s total budget, which comprises production and acquisitions, has shrunk from $336 million in 2007 to $286 million last year, but cuts have mostly affected acquisitions of Hollywood movies and skeins.