Co-production was developed by several European countries to revive their film industries and has become increasingly popular, spreading across the region and beyond. However, this scheme should be carefully examined as to whether it is truly beneficial to the film industry. In response, this paper proposes two new concepts, “corporation-led” and “state-led” co-productions by distinguishing them from the prevailing notion of “(international) co-production.” Corporation-led coproduction is to achieve the best outcome through the optimal utilization of production (or creative) factors and business activities. By contrast, state-led co-production has been used to enhance the national image and has been supported by financial incentives. As such, this type of co-production becomes a hindrance for the optimal utilization of production factors. All of these aspects can be found throughout the history of Europe’s co-production efforts. In the future, such an instrument should be redesigned in order to promote the film industry more effectively.