The believable atmosphere and some moments of real tension, along with Anne Baxter's starring performance, make "Carnival Story" worth watching despite its somewhat uneven quality overall. It has some strengths, but it leaves you feeling that it could have been improved without too much difficulty.
The story has an interesting setting, with the drama and romance taking place in an American traveling show that is touring Germany, having attracted little interest in the US. Although the portrayal of the show and its players uses a number of clichés, in general the atmosphere is believable, and it supplies an effective background to the story. The world of the carnival is self-contained to begin with, and their presence in a foreign country emphasizes their isolation from the 'real world'. Jay C. Flippen plays the show's manager, and his character adds an appropriate air of run-down authority.
Anne Baxter stars as the only German native among the main characters, an intense young woman who becomes involved romantically with more than one of the show's employees. In itself, the plot is the same as that in many other movies about romantic rivalry, with Baxter's character torn between the 'good' lover and the 'bad' lover. Baxter herself works well enough in the role, since her restless style fits in with her character here.
Most of the other characters, though, remain one-dimensional, and some of the confrontations and tense moments lose something as a result. When the dramatic turns work, it is usually because they take place in an interesting setting, rather than because they have been filmed with any particular skill. The pacing likewise is inconsistent. There are a number of slow stretches that do little of note, but then it does make good use of the recurring high dive scenes, with the pageantry, danger, and tension that they bring.
Overall, it has some definite strengths and some obvious weaknesses. It is essentially a formulaic drama about romantic rivalries, with a relatively interesting setting that hides enough of the weaknesses to make it worth seeing.
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