Cultural material is not a simple commodity that you can apply laws of supply and demand to, because cultural products are not economic substitutes for each other. This is one of the few areas where I think some protectionism may be justified, because if you import all your media then it tends to crowd out one's domestic culture, which in extreme cases can lead to social fragmentation. If you don't have any kind of domestic media output then that also limits your country's potential for tourism and inward investment.
I grew up in Ireland and although I was very interested in film from an early age there was very little domestic film or TV production going on; maybe 30-40% of what was on TV came from the UK and >50% came from the US (cheap for programmers to purchase given the tiny size of the market, and for political reasons we did not wish to get too much of our programming from the UK). There was only one TV channel for many years and it was quite demoralizing to realize that how little cultural output of our own there was. Apart from a documentary shot in 1934 by an Irish-American filmmaker, there wasn't a single Irish-produced feature film for nearly 50 years, until 1982 (when I was 12), and even that involved an English director. The domestic industry didn't really get going until the early 1990s.
As a kid, I would borrow library books and read magazine articles about film production but even the notion of 'home movies' seemed impossibly remote - I literally never saw a video or film camera until I moved to London. It didn't occur to me to pursue a career in film as a youth because the domestic industry simply didn't exist. Even with cheap digital technology available today, making a film is quite an expensive undertaking - there's no guarantee that filmmakers will simply bootstrap themselves as the inevitable result of market forces.