EN    EN EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 9.1.2009 
SEC(2008) 3097 final 
  
COMMISSION STAFF WORKING DOCUMENT 
 
Accompanying document to the 
Proposal for a 
 
DECISION OF THE EUROPEAN P ARLIAMENT AND OF THE COUNCIL 
  
ESTABLISHING AN AUDIOVISUAL C OOPERATION PROGRAMME WITH 
THIRD COUNTRIES  
 
MEDIA MUNDUS 
  
 
 
SUMMARY OF THE IM PACT ASSESSMENT  
 
 
{COM(2008) 892 final} 
{SEC(2008) 3098} {SEC(2008) 3102} 
 
EN 2   EN 1. INTRODUCTION  
The audiovisual sector is an essential vector for creating highly skille d future-oriented jobs 
and for conveying and developing cultural values . In the frame of the Lisbon strategy the 
audiovisual sector is particular ly relevant and contributes to the Lisbon agenda, namely to 
boost training, prosperity, growth and jobs in a knowledge-based economy. The audiovisual 
sector plays a major role in  the i2010 initia tive — the policy umbrella for the European 
Union’s information society and media polic ies — as part of the Lisbon agenda.  
Furthermore the audiovisual sector is important in the context of the UNESCO Convention on 
the Protection and Promotion of the Diversity of Cultural Expressions . This convention 
emphasises the specific and dual (cultural and economic) na ture of cultural goods and 
services. 
The major problem faced by the European audiov isual industry on international markets is the 
poor circulation of audiovisual works. Fore ign films — other than those from Hollywood 
studios — face a similar problem of limited circ ulation on European markets, although there 
is a demand for more diverse audiovisual content. 
The international audiovisual landscape has ch anged significantly over the last two decades, 
notably from the impact of technological developments like multi-channel digital television, 
digital cinema projection and video on demand. In some foreign markets this has created 
strong financial growth and pr omising investments and conse quently, a growing demand for 
more audiovisual content. Stru ctural weaknesses affecting the circulation of European works 
on foreign markets and inadequate financing of  European audiovisual companies prevent the 
industry from benefiting fully from this ne w expansion of international opportunities. 
Against this background the Impact Assessme nt identified two overall policy goals and 
general objectives for international cooperation: 
• To increase  the competitiveness of the EU audi ovisual industry on global markets. 
• To increase consumer choice and cultural di versity on the European and international 
markets.  
Consultations with the main stakeholders and prof essionals, such as participants in the current 
MEDIA 2007 programme, professionals from third countries, and MEDIA committee 
members have been extensive; an open public online consultati on was launched in April 2008 
and in the context of a public hearing, seve ral conferences and meetings, stakeholders 
provided extensive input. Furt hermore several services of  the Commission have been 
consulted and  DG INFSO, the author DG, concluded a service contract with Technopolis / 
Media Consulting Group  to acquire external expertise on and input for the impact assessment 
integrating ex-ante evaluation requirements. 
2. BACKGROUND OF THE INITIATIVE  
Considering the problems and challenges for the Eu ropean audiovisual sector arising from the 
internationalisation of markets the European  Parliament adopted, on 13 December 2007, for 
the 2008 budget, a Preparatory Action MEDIA International focusing on developing 
European Union relations with third-country a udiovisual markets. At the joint in vitation of 
Viviane Reding and Gilles Jacob, President of th e Cannes Film Festival, and in the presence 
of José Manuel Barroso, ministers in charge of audiovisual matters in the European Union and 
the EFTA countries met informally in Cannes on 19 May 2008, and adopted a declaration welcoming the European Parliament’s initiative on the MEDIA International Preparatory 
 
EN 3   EN Action and encouraging the Commission “ to pursue the development of  this initiative and to 
examine the desirability and the possibility of  presenting, before the end of the year, a 
proposal for a support programme to promot e cooperation between European audiovisual 
industry professionals and industry professionals in  third countries for the mutual benefit of 
all participants” . The results of the call for proposal s for the Preparatory Action showed a 
rapid and strong response from professionals with training, promotion and cinema network 
projects already covering the major Latin American and Asian markets. 
With a view to proposing a legal basi s following the Preparatory Action MEDIA 
International, DG INFSO prepared this Impact Assessment on a possible future MEDIA Mundus programme. 
3. P
ROBLEM DEFINITION AND RATIONALE FOR THE INTERVENTION  
The major problem identified by the Impact  Assessment for the European audiovisual 
industry on international markets is the poor circ ulation of audiovisual works. This problem 
affects not only European professionals who cannot  fully benefit from th e internationalisation 
of audiovisual markets but also the consumers that are faced with a limited choice and limited 
cultural diversity. The European Union itself, a major player in the negotiation of the UNESCO Convention on Cultural Diversity, is th erefore confronted w ith high expectations 
regarding its implementation, and could risk  losing its credibility in this regard. 
The reasons underlying the poor circulation of  audiovisual works are the following: the 
different European markets are fragmented no t only on the basis of language but also of 
market structure. The problem lies with the mark et size; the original market size determines 
the strength of the industry on the international stage. Individua lly all the Member States (and 
most of their foreign counterpart s) have relatively small markets compared to that of the USA. 
The distribution structure in Europe is made up of small individual co mpanies, unlike their 
large multinational vertically-integrated coun terparts in the USA; hence the lack of 
competitiveness of the European audiovisual  industry. In addition European companies 
struggle with the problem of under-funding. Audiovi sual works are essentially financed with 
national public resources, limiting the need for foreign investment and export. Moreover 
demand and viewing habits of audiences domin ated by US and/or domestic blockbusters 
represent a significant obstacle to showing a real diversity. Audiences (in particular young 
audiences) are not aware of the wide choice of  culturally diverse films, although there is well 
documented demand for greater diversity. 
Existing EU programmes in the area of audiov isual support such as MEDIA 2007 have had a 
successful impact on the audiovisual indu stry and the circulation of European 
cinematographic works inside Europe. It cannot,  however, address the challenges of the rapid 
internationalisation of the audiovisual sector . Programmes like EUROMED Audiovisual II or 
the EU-ACP support programme for cinema and the audiovisual industry are regional 
development programmes and as such have  a different focus and objectives. A new 
programme could create considerable synergies with these programmes.  
Other international activ ities such as existing internationa l film funds mostly have limited 
budgetary allocations. Co-production treaties ar e rarely endowed with budgetary means and 
therefore inefficient in addressi ng the problems described above. 
 
EN 4   EN 4. OBJECTIVES  
The general objectives are to strengthen intern ational cooperation in order to increase the 
competitiveness of the European audiovisual s ector, and to increase consumer choice and 
cultural diversity on the European  and international markets. 
Four specific objectives have been identified: 
(1) Increase information exchange and market  intelligence, in particular through 
training activities, facilitate networki ng between European and third-country 
audiovisual professionals in order to improve access to foreign markets and to 
build trust and long-term commercial relationships. 
(2) Contribute towards the facilitation of international co-p roductions in the 
audiovisual markets.  
(3) Improve transnational distribution of  audiovisual works and enhance the 
visibility of European audiovisual work s in third countries and vice versa as 
well as increasing consumer choice for European and third-country audiences.  
(4) Reach new audiences and promote film literacy. 
5. P
OLICY OPTIONS  
Three different policy options (including two diffe rent scenarios to implement these specific 
objectives) have been assessed regarding their economical, social, cultural and environmental 
impact and their cost-effectiveness.  
(1) Business as usual  (in the sense of continuing th e existing European activities 
in the audiovisual sector). 
(2) Extension of existing instruments . 
(3) Creation of a new instrument  MEDIA Mundus. 
As to the business as usual option, in view of the situation evolving on world markets and the 
technological challenges, the s ituation for European audiovisual companies would deteriorate 
significantly over time. Business as usual  would not entail new costs, but would have a 
negative cost: if the opportuni ties of internationa lisation are not se ized by European 
companies in the new fast-growing markets. 
An extension of existing instruments  by opening the MEDIA 2007 programme to further 
participation and cooperation woul d entail various difficulties rela ted to WTO rules as well as 
resource-intensive negotiations at governmental  level and was therefore considered to be 
inefficient. Also, an opening of MEDIA 2007, not in the sense of full membership or 
cooperation, but in the sense that strands for in ternational cooperation co uld be introduced in 
the current programme, was considered. In te rms of costs and procedure the options are 
similar. However this policy option, although bei ng an alternative to the creation of a new 
instrument, was discarded becau se one programme focusing on in ternal and external policies 
at the same time would become very complex, lead  to brand confusion and be less effective in 
meeting the policy objectives defined. 
Under the option creation of a new instrument  the four specific objectives  were broken down 
to more detailed operational objectives  / action lines  that refer to the actual deliverables: 
(1) Increase information exchange and market in telligence, in particular through training 
activities, facilitate netw orking between European and third country audiovisual 
 
EN 5   EN professionals in order to improve access to foreign markets and to build trust and long-
term commercial relationships. 
• Building up websites and databases (aims at  collecting and disseminating information 
about European and third count ries’ audiovisual markets) 
• Network of contact points (in various regions of  the world in order to monitor the regional 
audiovisual industry) 
• Training activities (aims at supporting various tr aining measures such as the certification of 
training institutions, provide scholarships or continuous a nd initial training projects) 
• Market access mechanisms and events (aims at  supporting access to film market and other 
key events) 
(2) Facilitation of international co-produc tions in the audiovisual markets.  
• Supporting the development stage of co-p roduction (aims at supporting script 
development, partner searching or other ac tivities in the development phase such as 
financing or casting) 
• Supporting the funding of co-productions (aims at a direct funding to co-productions or 
measures that could facilitate the access to commercial financing of co-productions) 
(3) Improve transnational distribution of audiovi sual works. Enhance the visibility of 
European audiovisual works in the world a nd vice versa and increase consumer choice 
for European / third-country audiences. 
• Distribution support (aims at supporting the costs of acquisition, printing, advertising, 
dubbing and subtitling etc.) 
• Cinema networks (aims at supporting cinema ne tworks in Europe a nd in third countries 
that commit themselves to programming of a significant number/percentage of European 
audiovisual works and vice versa) 
• Support to broadcasters and digital platfo rms (aims at encouraging the showing of 
European works on TV and platforms like VOD, m obile TV etc. in third countries and vice 
versa) 
(4) Reach new audiences and promote film literacy 
• Festivals and special events (aims at supporti ng festivals that progr amme third countries’ 
and European audiovisual works or awareness-raising events) 
• Networks to target young audience s including education activities 
• Support for TV programmes dedicated to young audiences 
The definition of the specific and operational ob jectives was largely inspired by stakeholders’ 
consultation and is based on cost-benefit an alyses carried out by the various ex-post 
evaluations of MEDIA programmes and the ex-ante evaluation of MEDIA 2007. 
Two different scenarios have been examined within the specific objective ‘facilitation of 
international co-productions’ and ‘supporting dist ribution’. Regarding the facilitation of co-
productions the alternative scen arios related either  to the setting up of funds by the 
Commission (development fund for co-productions , co-production funds for feature films, 
documentary and animation films, gap financing f und), or alternatively th e financing of script 
development training, market access mechanisms and existing co-production funds. In view 
of the heavy administrative burden, the creati on of co-production funding instruments by the 
Commission was not pursued further. With rega rd to distribution support, one scenario was 
more oriented towards the classical MEDI A approach. It was however found that the 
requirements for international cooperation regardi ng distribution were diffe rent on the internal 
 
EN 6   EN and the external markets. Therefore an opti on focusing the support on partnerships between 
rights-holders and distributor s was assessed to be more effective and appropriate.  
The calculation of the cost implications that was used to compare the different scenarios was 
in particular based on the evaluations of pr evious MEDIA programmes, the experiences of 
MEDIA 2007, the public consultations and the Preparatory Action MEDIA International. 
In summary the Impact Assessment reached the conclusion that the following scenario should 
be further pursued in order to achieve the objectives identified: 
 Specific Objective 1: Information exchange and market intelligence 
1) Building up Websites and Databases 
2) Network of contact points 
4) Initial training 
5) Continuous training  
6) Market access mechanisms 
Specific Objective 2: Facilitating int ernational co-production activities 
 1) Development 
a) Script development 
b) Co-production markets/partner search (pitching) 
 2) Co-production 
a) Supplement existing co-production funds 
b) Access to finance  
Specific Objective 3: Distribu tion and circulation support 
1) Support to partnerships of rights holders, sales agents and distributors  
2) Cinema network 
3) Support to broadcasters and digital platforms 
Specific Objective 4: Reach new au diences and promote film literacy 
1) Festivals 
2) Special events 
3) Networks to target young audiences including education activities 
4) Support for TV programmes dedicated to young audiences 
 
In order to take into account the current economic cr isis, a third scenario has been built on the basis of 
a smaller budget than that of scenarios 1 and 2. This "crisis" scenario intends to maximise the 
effectiveness of the intervention given the budgeta ry constraint. Hence, only the most effective 
operational objectives and actions analysed under scenarios 1 and 2 have been selected. They have 
been gathered into a narrower framework limited to  three specific objectives. Such an option would 
ensure continuity following the preparatory acti on and could pave the way for a larger programme 
under new financial perspectives.   
 
Specific Objective 1: Information exchange and market intelligence 
1) Continuous training  
Specific Objective 2: Compet itiveness and distribution 
1) Co-production markets/partner search (pitching) 
 
EN 7   EN 2) Support to partnerships of right holders, sales agents and distributors  
Specific Objective 3: Circulation  
1) Cinema network 
2) Support to broadcasters and digital platforms 
3) Support for networks/partnerships dedicated to film literacy 
 
6. CONCLUSION  
The Impact Assessment on the establishment of  an audiovisual cooperation programme with 
third countries reached the following conclusions:  There is a lack of ci rculation of European 
audiovisual works in third countries and vice vers a. This has an impact on the competitiveness 
of the European audiovisual sector and, as a consequence, European companies cannot fully 
benefit from the opportunities of  internationalisation. Furtherm ore, consumers cannot benefit 
from a wide choice of films and therefore ther e is limited cultural diversity. A new instrument 
should therefore pursue those two global objecti ves: to increase the competitiveness of the 
European audiovisual sector and to increas e consumer choice and cultural diversity.