Radio Television Espanola (RTVE), Spain's main pubcasting group, announced last week it would match 2007's e34 million ($53 million) film investment this year.

But it's scaling back fiction feature financing from 55 pics in 2007 to 35-37 this year. Instead, RTVE will back 13 TV movies, up five from last year, and 22-25 docupics.

One reason for the cut is practical. RTVE's inventories are overflowing. It has still to air 80 Spanish fiction features, says Gustavo Ferrada, RTVE head of cinema.

Also, Ferrada adds, RTVE doesn't have the marketing muscle to bow 55-60 fiction films a year, and Spain doesn't have the market to absorb them.

On some pics, it hopes to recoup its investment. Others reflect RTVE's public service broadcasting agenda, Ferrada says. These will include "prestige productions, first films, riskier projects, festival players, sexual equality pics, movies from less-favored sectors, or less-developed regional industries, or in other official languages."

RTVE always takes Spanish broadcast rights, but sometimes will add DVD or international rights as well.

And it's cherry-picking choice Spanish pics including Pedro Almodovar's "Broken Embraces"; Fernando Trueba's first fiction film in seven years, "El baile de la Victoria"; and Joaquin Oristrell's "Dieta mediterranea," a romantic comedy about a Barcelona femme master chef.

Last year, Spain produced 172 films. Made in an auteur hothouse, most have pretensions beyond pure audience-driven entertainment.

Shunned by commercial broadcasters Telecinco and Antena 3, their only hope of a national TV slot, which often makes or breaks bottom lines, is RTVE.

Like Spain's state subsidies, RTVE pickups seemed designed by political motives, spread widely to annoy as few members of a vocal, culture-wielding production sector as possible.

RTVE's policy has some illustrious snubs: Albert Serra's "Song of the Birds," the only feature from a Spanish director selected for Cannes, hasn't seen an RTVE pickup.

The pubcaster's shift in policy comes two months after Catalonia's government toughened subsidy regs, encouraging fewer, but higher-bracket Catalan pics.

The consequences of the crackdown, boosted by market forces, are working through the industry: production is splitting between higher-bracket pics from big-name auteurs, genre production and a flowering microbudget digital-vid sector.