LOS ANGELES -- For years Europe was a hunting ground for the U.S. television industry, a giant market that lapped up reruns of "Dallas" and "Falcon Crest" and added pure profit to what already had been made here.
Programming was relatively cheap, the number of European stations was rising, and the fascination with all things American was limitless.
But the dynamics are changing quickly.
Last year, for the first time in a decade, the revenue from television programming sold by the major film studios to European markets declined from the previous year, falling 16 percent from 1990 to 1991, according to the Motion Picture Association of America.
Not that the demise of television exports to Europe is imminent. The United States still is expected to supply about 30 percent of Western Europe's 625,000 hours of programming in 1992, said Graham Wilde, a media analyst with CIT Research in London.
Among American shows that remain popular are "Baywatch," "The Simpsons" and "Twin Peaks."
Nonetheless, the U.S. share of the Western European market has "been going down marginally, by 1 or 2 percent every two years," said Mr. Wilde.
Worse, American shows are being relegated to the worst hours on the European television dial, leading to a decline in value.
"American programs have disappeared from the top programs in all the major channels over the past three or four years," said Jean-Luc Renaud, president of Globalcom, a London-based media consulting firm.
No single event has led to the shrinking market.
Part of it involves a new desire to produce distinctly European fare. Part of it relates to changing tastes and economics.
The European erosion hardly could have come at a worse time.
Network revenues are falling and producers face increasingly long trails before television programs recoup their initial investment.
Foreign television sales are crucial to producers because fees received from the networks do not cover production costs. The difference is made up through syndicating in the United States and overseas.
To Europeans, the trend to domestic programming is hardly surprising.
"The principle in Europe is that to get viewers, you have to show them something from their country," said Mr. Wilde.
He said that major transformations now taking place in Europe, such as the elimination of border checkpoints, have increased regional interest and reduced interest in America.
"I think we're looking for our examples less and less across the Atlantic and more and more at each other," Mr. Wilde said.
"It's even more specific than within Europe. In England, the programs that get the highest ratings are British. Even German-speaking Swiss prefer films about Switzerland to Austrian films," he said.
Indeed, few European shows have managed to create series that can transcend national borders.
One show that has is "Derrick," the story of a mild-mannered German homicide policeman. Its 17 years of production apparently have given it enough time to acquire a transnational appeal.
Other examples of pan-European shows, though, are hard to find.
Some say that the decline in U.S.-made programming began in 1989 when the European Community enacted a law that required at least 50 percent of all programming in the 12-member states to be EC-originated.
In addition, many European countries slapped on their own broadcast limitations.
France is considered the country with the harshest quotas; its national law says at least 60 percent of the programming must be French-produced.
"I've said in time these quotas will wound us and bleed us and we have evidence that this is beginning to happen," said Jack Valenti, president of the Motion Picture Association of America, referring to the decline in sales from 1990 to 1991.
One factor that is blurring the balance of trade picture is the growing trend toward co-production. More alliances are being struck between U.S. and European producers that can mean additional financing and the injection of elements that have appeal beyond national borders.