EN Official Journal of the European Union C 230/47

Opinion of the European Economic and Social Committee on ‘European film in the digital era’

(own-initiative opinion)

(2015/C 230/07)

Rapporteur: Anna Maria DARMANIN

On 6 November 2014, the European Economic and Social Committee, acting under Article 29(2) of its Rules of Procedure, decided to draw up an own-initiative opinion on

European film in the digital era.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee’s work on the subject, adopted its opinion on 11 November 2014.

At its 503rd plenary session, held on 10 and 11 December 2014 (meeting of 10 December), the European Economic and Social Committee adopted the following opinion by 190 votes to nine with one abstention.

1. Recommendations

1.1. The EESC welcomes the Commission Communication on ‘European film in the digital era — Bridging cultural diversity and competitiveness’ (COM(2014) 272 final), which rightly raises some points for discussion and reflection concerning this very important sector in Europe.

1.2. The EESC emphasises that there needs to be an appropriate balance between the audiovisual sector’s value in a business and commercial sense and its value to Europe from a cultural heritage perspective. Intrinsically these two aspects cannot be dealt with separately.

1.3. It is high time that one or more innovative and new business models for the sector be openly discussed with a view to taking up opportunities existing within the digital world. The EESC therefore encourages the sector, the Commission and also national governments to be open and willing to discuss and promote such business models.

1.4. Financing is an area that needs to be looked into; competitiveness must be sought but not at the cost of the cultural dimension of film in Europe. Finance is primarily up to the Member States. Nonetheless, an open debate on methodologies for ensuring the maximisation of financing and alternative methods of financing should be looked into. This includes public funding to attract private funding; a more rational use of public resources and complementarity between EU and MS funding; and private funding from new players such as internet providers and telecoms companies.

1.5. Strengthening the creative environment should also be a key priority for the roadmap of the sector. Such an approach should be addressed within the Commission communication and should cover the educational environment, the working conditions of people within the sector, the development of creative talent, creative expression, how to add value and European film literacy and language.

1.6. The EESC endorses the idea that the audience should be at the heart of discussions about the audiovisual sector, as they are not only the beneficiaries but often also the ones who shape trends and hence lead development.

1.7. The EESC believes that greater emphasis should be placed on data collection at European level for a better understanding of the industry.

1.8. The EESC would emphasise that the Commission communication should also highlight, as one of the challenges, the current situation regarding working conditions within the sector, covering workers, the self-employed and SMEs, some of which are currently, in various ways, facing precarious work conditions, partly resulting from the particularities of the industry itself but also as a result of lack of competitiveness where it is being attempted to save money from working payments.

1.9. Film literacy is considered by the EESC to be an important aspect in encouraging more Europeans to appreciate and seek out European films. The EESC therefore recommends that the promotion of film literacy be taken up at European level and also at national level.

1.10. Accessibility is another area in which the EESC believes greater effort should be made, so research and innovation should be aimed at overcoming barriers such as language and disability.

1.11. The European Film Forum proposed by the European Commission should encompass all stakeholders within the audiovisual sector, and is an important tool for bringing together all players within the audiovisual sector to address the key issues facing the sector. The EESC supports this long-awaited consultation forum and emphasises that it is essential that all stakeholders within the sector be equally involved; this also includes smaller stakeholder groups, including consumer and employee representatives.

1.12. Key challenges and opportunities within the digital era should be the focus of such a forum, channelling policy and strategy into specific measures within the sector.

1.13. Furthermore, the EESC stresses that although it is fast changing and may be perceived as a challenge for the sector, the digital world (including the prospect of satellite communication in line with the EU’s plans for 2020) nonetheless offers a multitude of opportunities for the film industry.

2. Gist of the Communication

2.1. The film industry in Europe, one of the instruments of our cultural diversity, is greatly distinct and also very creative. It is a strong asset to the mass of cultural heritage within Europe and yet an industry under significant threats due to a number of challenges.

2.2. The Commission has in the past issued a number of directives related to specific areas of the film industry, such as intellectual property. This communication is the first in the recent past to focus on the entire industry.

2.3. The Commission paper highlights the particularities the European film sector is facing, namely: — European film audiences, whereby few European films make it to the cinema or television of another country; — changing consumption patterns, whereby film viewing remains the same although the medium is changing. Fewer people go to the cinema and more view films on television or VoD; — flaws in the approach to reach a global market, amongst them fragmentation in funding and limited opportunities for internationalisation.

2.4. The Commission document therefore sets out to identify and address these challenges as an initial basis of discussion. These areas being: — funding; — the business model within the sector; — giving more impetus to the creative sector; — audience access.

3. General comments

3.1. The EESC welcomes the initiative of the Commission to set out the basis of discussion amongst all stakeholders and other players within the audiovisual sector in Europe. This dialogue is imperative and has been needed for a long time, not only to reap the benefits offered by the changing digital world and emerging technologies but also to strengthen further this diverse and complex industry.

3.2. The EESC agrees with the EC on the specific challenges, which have been highlighted within the document. However the EESC would also add another challenge that has been omitted within the document, this would be the current work environment that workers, self-employed and entrepreneurs are facing within this sector.

3.3. Within the areas of focus to be addressed the EESC is in agreement with the areas outlined within the document. However the EESC would also add as necessary areas to be discussed and addressed being: — the education environment, not limiting this to solely the business skills within the education system; — the working conditions and environment; — the link between theatre and cinema; — a more comprehensive data collection and a showcase of best practice; — the internal market and the link between IPR and copyright to the industry.

3.4. Furthermore, the EESC stresses that although it is fast changing and may be perceived as a challenge for the sector, the digital world nonetheless offers a multitude of opportunities for the film industry. This includes the prospect of satellite communication in line with the EU’s satellite infrastructure plans for 2020 and making use of satellites to distribute films in a more flexible, environmentally-friendly and cost-efficient way to cinemas.

4. Specific comments

The financing environment of the audiovisual sector

4.1. The EESC supports the concept that public funding need not necessarily be augmented within the sector but rather optimised for the added value of the industry. Public funding is up to the Member States and EU funding should further enhance the effectiveness of the local funding. Such public funding ought to be used however to attract more private funding.

4.2. The funding model for the audiovisual industry needs to be based on support devoted to different kinds of products and on a blend of direct grants and leverage financing to facilitate private investors to enter the market. The role of leveraging of public funding is essential to obtain a more rational use of public resources and to concentrate the effort on cultural products.

4.3. The EESC emphasises that there is a fine balance between achieving competitiveness and creative expression; public funding should not just be addressed to one or the other but should also be balanced out accordingly.

4.4. In addition to the questions raised by the Commission within the public funding sphere as a basis of debate, the EESC would also add the following: 4.4.1. At a supranational level, due consideration needs to be given to developing a ‘Europe’ brand of films. National labelling is important and should always remain a core part of the film’s credits, but a European brand needs to be further developed within the global field and also at a national level. 4.4.2. Guarantee fund schemes and tax incentives are the main financial tools to be used; guarantee funds — especially when Basel compliant — foster banks’ lending, while tax incentives foster equity or semi equity investments. These financial tools must be structured in a way that results in their being complimentary with the European ones, mainly the Creative Europe financial initiative, guarantee funds for PIMEs and EU Structural Funds. 4.4.3. Further funding instruments such as H2020 and Erasmus+ should be used within this sector and directed to this sector with an appropriate balance and not simply the Creative Europe programme.

4.5. The Commission communication refers to private investment as a means of funding for the industry. The EESC recommends that new players within the digital sector contribute towards the financing of the industry, such players being for example the telecoms companies and the content providers.

4.6. Single initiatives are not enough; governments and the EU have to develop a financial infrastructure for the audiovisual industry aimed at implementing and fostering several financial and non-financial services — including capacity-building services — devoted to the whole production chain of the industry: development, production, distribution.

An innovative business environment

4.7. The EESC has been part of the debate in Intellectual Property Rights, the Digital Single Market and the AVMSD. Nonetheless the EESC supports the notion of exploring out of the box business models that make sense within the current technological changes of the digital era. The EESC also emphasises that there is a need to better streamline all the current policies that exist for this sector.

4.8. New business models need to be explored and tenacity to make bold decisions should be supported. However the EESC emphasises that to achieve this it is necessary that all stakeholders are openly and comprehensively involved in the discussions towards changing business models. Moreover such a debate ought to be driven by the industry itself.

4.9. The EESC firmly believes that this aspect is crucial to the success of the industry and therefore calls upon all stakeholders to be open to such new business models, not only so as to reap the full benefits offered by the digital era but also in order to adapt to rapidly changing consumer behavioural patterns.

4.10. There is a need for a cultural change in the producers’ and broadcasters’ mentality: in the future, products devoted to cinemas and TV will co-exist with cross media products: producers and broadcasters have to develop different business models in relation to the different nature of the products: they have to think of different budgets and different release strategies according to the nature and the commercial potential of the specific products. At the same time, governments have to rethink the public funding model according to a more balanced blending of supports.

4.11. The EESC would be cautious about simply tweaking current business practices without looking into practices from a completely innovative angle. For example, simply establishing more flexible release windows may not necessarily address the business solutions that the digital era requires.

Strengthening the creative environment

4.12. The EESC advocates that the cooperation between films schools is essential for the further enhancement of the sector. Furthermore the EESC emphasises that such aspect of the sector, the film schools, also need to be involved in the stakeholder discussions being held at a European level.

4.13. A reality that requires further consideration within this area is the particular challenges faced by the film schools whereby technology is so fast changing that in many occasions film schools are using out of date technology for the training of their students. Hence many times producing professionals who are then not ready for the technological environment they are faced within the industry itself.

Accessibility and audience development

4.14. The EESC supports the notion that the audience should also be at the heart of the driving force within the sector. For this reason the EESC emphasises further the requirement of proper data at a European level and also the involvement of consumer organisations within the stakeholders’ discussions, such as the European Film Forum.

Data collection and analysis

4.15. The EESC believes that greater emphasis should be placed on data collection at a European level for a better understanding of the industry. Such data collection should not only include the element of audiences within the sector but also the use of funding at different levels, the competitiveness of the sector and also the working environment and conditions.

4.16. The EESC also recognises that there is a need to develop a data source at national and EU levels which will also include data used by financial intermediaries to assess and manage the investment risk.

Working environment and working conditions

4.17. The EESC strongly believes that the area of working conditions and the working environment within the sector should be an area of discussion and focus. Currently the sector is so diverse that often a lack of data on working conditions results in a lack of focus on this area.

4.18. Precarious work is unfortunately becoming even more widespread within the sector, partly resulting from the particularities of the industry itself (production taking place within a short timeframe for example) but also as a result of lack of competitiveness where money is attempted to being saved from working payments.

4.19. Hence the EESC invites the Commission to include this challenge within the focus of the Communication and also address it in the discussions. Stakeholders representing the film sector workers need to be involved within the stakeholders’ discussions and the European Film Forum.

European Film Forum

4.20. The EESC supports the initiative of the Commission to establish the European Film Forum. It is overdue that the sector gets together so as to discuss the issues raised as pertinent for the competitiveness of the industry within today’s digital era.

4.21. The EESC emphasises that it is essential that all stakeholders be equally involved within this sector. This also includes the smaller stakeholder groups, the less ‘powerful ones’ and also the representatives of the consumers and of the workers.

4.22. Whereas the television sector is not as severely affected as the film industry by the digital era, it is important to also include this sector and discuss it within the wider debate as this is also an important component of the audio visual sector.

Promotion of European film literacy

4.23. Film literacy is considered by the EESC as an important aspect in attracting more Europeans to appreciate and seek out European films. Hence the EESC recommends that the promotion of such film literacy be taken up at European level and also at national level. This would not only benefit the industry itself but would also highlight an important element in the manifestation of European cultural diversity. Whereas the specific model of film appreciation in schools may not necessarily work, the EESC believes that models and campaigns should be created that will highlight the success, beauty and art of the European film sector.

Accessibility

4.24. Language may be considered as one of the barriers to audiences across Europe and also overseas. Language is a physical barrier but also part of cultural diversity. Furthermore, film is a powerful tool for foreign language uptake. Nonetheless, the EESC believes that H2020 funds should also be directed towards an innovative approach to dubbing in a cost-effective manner through leading and upcoming technologies.

4.25. Furthermore the EESC strongly encourages the audiovisual sector to use the tools available to ensure that the sector’s products can also be enjoyed by audiences with visual and/or auditory limitations or impairments. Research efforts should also be devoted to making such tools for accessibility more cost-effective.