Proposal for a COUNCIL DECISION on the implementation of a programme to encourage the development, distribution and promotion of European audiovisual works (MEDIA Plus - Development, Distribution and Promotion) (2001-2005)

(presented by the Commission)

Proposal for a COUNCIL DECISION on the implementation of a programme to encourage the development, distribution and promotion of European audiovisual works (MEDIA Plus - Development, Distribution and Promotion) (2001-2005)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Article 157(3) thereof,

Having regard to the proposal from the Commission [31],

[31] OJ C

Having regard to the opinion of the European Parliament [32],

[32] OJ C

Having regard to the opinion of the Economic and Social Committee [33],

[33] OJ C

Whereas:

(1) From 6 to 8 April 1998, the Commission, in collaboration with the United Kingdom presidency, held a European audiovisual conference on "Challenges and opportunities of the digital age", in Birmingham. This consultation process revealed the need for an enhanced programme of support for the European audiovisual industry, in particular in the area of the development, distribution and promotion of European audiovisual works. In the digital age, activities in the audiovisual field contribute towards the creation of new jobs, particularly in the production and dissemination of audiovisual content;

(2) The Culture/Audiovisual Council of 28 May 1998, in approving the outcome of the European Audiovisual Conference in Birmingham, highlighted the desirability of encouraging the development a strong and competitive European audiovisual programme industry, taking particular account of Europe's cultural diversity and the specific conditions obtaining in restricted linguistic areas.

(3) The Report of the High-Level Group on Audiovisual Policy of 26 October 1998, entitled "The Digital Age: European Audiovisual Policy", recognises the need to strengthen support measures for the cinematographic and audiovisual industry, in particular by endowing the MEDIA programme with resources that are commensurate with the size and strategic importance of the industry.

(4) The Communication from the Commission to the European Parliament and the Council of Ministers entitled "Audiovisual Policy: Next Steps" [34] recognises the need for increased public support, particularly at Community level, for strengthening the competitiveness of the European audiovisual industry.

[34] COM(1998) 446 final, 14.07.1998.

(5) The Green Paper on the "Convergence of the telecommunications, Media and Information Technology Sectors, and the Implications for Regulation" [35] underlines the risk of a shortage of good quality content on the digital and analogue television market.

[35] COM(97) 623 final, 3.12.1997

(6) The public consultation on the Green Paper, conducted by the Commission [36], highlighted the need to establish a framework to underpin the distribution and promotion of European audiovisual content for the traditional and new media in a digital environment.

[36] SEC(1998) 1284 final, 29.7.1998.

(7) In its Conclusions of 27 September 1999 regarding the results of the public consultation on the Convergence Green Paper [37], the Council invited the Commission to take account of the outcome of the consultation when drawing up proposals for measures to strengthen the European audiovisual industry, including the multimedia sector.

[37] OJ C 283, 6.10.1999, p. 1.

(8) The Commission implemented an "Action programme to promote the development of the European audiovisual industry (MEDIA) (1991-1995)", adopted by Council Decision 90/685/EEC [38], including in particular measures designed to support the development and distribution of European audiovisual works.

[38] OJ L 380, 31.12.1990, p. 37.

(9) The Community strategy for developing and strengthening the European audiovisual industry was confirmed in the framework of the MEDIA II Programme (1996-2000), adopted by Council Decision 95/563/EC [39], and by Council Decision 95/564/EC [40]. It is appropriate, on the basis of the experience acquired from the Programme, to ensure its extension, taking into account the results obtained.

[39] OJ L 321, 30.12.1995, p. 25.

[40] OJ L 321, 30.12.1995, p. 33.

(10) The Commission report on the results obtained under the MEDIA II programme (1996-2000) from 1 January 1996 to 30 June 1998 states that the Programme responds to the necessary subsidiarity of Community funds compared with national funds, since MEDIA areas of involvement complement the traditional emphasis of the national mechanisms [41].

[41] COM(1999) 91 final, 16.03.1999

(11) It is necessary to take into account the cultural aspects of the audiovisual sector, in accordance with Article 151 of the Treaty.

(12) The advent of a European audiovisual market necessitates the development and production of European works, namely works originating from Member States as well as works originating from European third countries participating in the MEDIA Plus programme or having a cooperation framework satisfying the conditions set out in Article 6 of Council Directive 89/552/EEC of 3 October 1989 on the coordination of certain provisions laid down by law, regulation or administrative action in Member States concerning the pursuit of television broadcasting activities [42], as amended by European Parliament and Council Directive 97/36/EC [43].

[42] OJ L 298, 17.10.1989, p. 23.

[43] OJ L 202, 30.07.1997 p. 60.

(13) The competitiveness of the audiovisual programme industry depends on the use of new technologies at the programme development, production and distribution stages. It is therefore appropriate to ensure suitable and effective coordination with the measures undertaken in the field of new technologies, in particular the Fifth Framework Programme of the European Community for research, technological development and demonstration activities (1998-2002), as adopted by Decision No 182/1999/EC of the European Parliament and of the Council [44].

[44] OJ L 26, 1.2.1999, p. 1.

(14) In its Report to the European Council, entitled Job opportunities in the information society [45], the Commission referred to the major job-creation potential provided by the new audiovisual services.

[45] COM(1998) 590 final.

(15) In its Communication on Community policies in support of employment [46], the Commission recognised the MEDIA II Programme's positive impact on employment in the audiovisual sector.

[46] COM (1999) 167 final.

(16) There is a need to improve the conditions for distributing European cinematographic works on the European and international markets. Cooperation between international and national distributors, cinema owners and producers should be encouraged and support should be given to concerted action to promote common scheduling measures at European level.

(17) There is a need for improvement in the television broadcasting prospects of European works on the European and international markets. Cooperation between broadcasters, (as defined in Article 2 of Directive 89/552/EEC, international distributors and producers should be encouraged.

(18) There is a need to facilitate market access for independent European production and distribution companies, and to promote both European works and European companies in the audiovisual sector.

(19) Public access to the European audiovisual heritage should be improved, in particular through its digitisation and networking at European level.

(20) The associated countries of Central and Eastern Europe, as well as Cyprus, Malta, Turkey and those EFTA countries which are parties to the EEA Agreement are recognised as potential participants in Community programmes on the basis of supplementary appropriations and in accordance with the procedures to be agreed with those countries.

(21) The other countries of Europe which are parties to the European Convention on Transfrontier Television are an integral part of the European audiovisual area and should therefore be enabled to participate in this Programme on the basis of supplementary appropriations, in accordance with the procedures to be established in the agreement between the interested parties. Those countries should be able, if they wish, and regard being had to budgetary considerations or the priorities of their audiovisual industries, to participate in the programme and to benefit under a more limited cooperation formula, on the basis of supplementary appropriations and specific arrangements to be agreed between the interested parties.

(22) Cooperation with non-European third countries, developed on the basis of mutual and balanced interests, may enable the European audiovisual industry to derive an added value in terms of the promotion, market access, distribution, dissemination and exploitation of European works in those countries. Such cooperation should be developed on the basis of supplementary appropriations and specific arrangements to be established in the agreement between the interested parties.

(23) A financial reference amount, within the meaning of point 2 of the Declaration by the European Parliament, the Council and the Commission of 6 March 1995 [47], is included in this Decision for the entire duration of the programme, without prejudice to the powers of the budgetary authority as defined by the Treaty,

[47] OJ C 102, 4.4.1996, p. 4.

(24) In accordance with Article 2 of Council Decision 1999/468/EC of 28 June 1999, laying down the procedures for the exercise of implementing powers conferred on the Commission [48], measures for the implementation of this Decision should be adopted by use of the advisory procedure provided for in Article 3 of that Decision.

[48] OJ L 184, 17.7.1999, p. 23

HAS DECIDED AS FOLLOWS:

Article 1

1. A programme (hereinafter referred to as "the Programme"), is hereby established to encourage the development, distribution and promotion of European audiovisual works within and outside the Community, to run from 1 January 2001 to 31 December 2005, for the purpose of strengthening the European audiovisual industry.

2. The objectives of the Programme are as follows:

(a) an improvement in the competitiveness of the European audiovisual industry on the European and international markets, by supporting the development, distribution and promotion of European audiovisual works, taking due account of the development of new technologies;

(b) respect for European linguistic and cultural diversity;

(c) exploitation of the European audiovisual heritage, and in particular its digitisation and networking;

(d) the development of the audiovisual sector in countries or regions with a low capacity for audiovisual production and/or a restricted geographical and linguistic area;

(e) building up a production and distribution sector, especially comprising small and medium-sized enterprises.

Those objectives shall be realised in accordance with the detailed arrangements set out in the Annex.

Article 2

In the development sector, the specific objectives of the Programme are as follows:

(a) to promote, by providing financial support, the development of production projects (dramas for cinema or television, creative documentaries, animated films for television or cinema, works exploiting the audiovisual and cinematographic heritage) submitted by companies and aimed at the European and international markets;

(b) to promote, by providing financial support, the development of production projects that make use of new creation, production and dissemination technologies.

Article 3

In the distribution sector, the specific objectives of the Programme are as follows:

(a) to strengthen the European distribution sector in the field of cinema by encouraging distributors to invest in the acquisition and promotion of non-domestic European cinema films;

(b) to foster the wider transnational dissemination of non-domestic European films on the European and international markets through measures to stimulate their distribution and their screening in cinemas;

(c) to strengthen the distribution sector for European works on media intended for private use, by encouraging distributors to invest in digital technology and in the promotion of non-domestic European works;

(d) to promote the movement, in the Community and outside it, of European television programmes intended for a European and world audience, by encouraging independent European broadcasters and independent distributors and producers to cooperate right from the production stage;

(e) to encourage the creation of catalogues of Europe works in digital format intended for exploitation on new media;

(f) to support the linguistic diversity of European audiovisual and cinematographic works.

Article 4

In the field of promotion and market access, the Programme aims to:

(a) facilitate and encourage the promotion and movement of European audiovisual and cinematographic works at trade fairs in Europe and around the globe, as well as at European audiovisual festivals;

(b) encourage the networking of operators at European level, particularly by supporting joint activities between national promotion organisations.

Article 5

1. Beneficiaries of Community support shall provide a significant proportion of the funding. Community funding shall not exceed 50% of the cost of operations. In the cases expressly provided for in the Annex, this percentage may nonetheless reach 60% of the cost of operations.

2. The financial reference amount for implementation of the Programme for the period referred to in Article 1(1) shall be EUR 350 million. The annual appropriations shall be authorised by the budgetary authority within the limits of the financial perspectives.

3. Without prejudice to the agreements and conventions to which the Community is a contracting party, the undertakings benefiting from the programme shall be owned and shall continue to be owned, whether directly or by majority participation, by Member States and/or by nationals of Member States.

Article 6

Financial support under the Programme may be granted in the form of conditionally repayable advances or subsidies, as defined in the Annex. The repayments under the Programme, together with the repayments from operations under the MEDIA programme (1991-95) and MEDIA II programme (1996-2000), shall be allocated to the requirements of the MEDIA Plus Programme.

Article 7

The Commission shall be responsible for the implementation of the Programme, in accordance with the procedure referred to in Article 8(2) and with the rules laid down in the Annex.

Article 8

1. The Commission shall be assisted by the committee (the "MEDIA Committee") established by Article 6 of Decision xx/xxx/EC [49] of the European Parliament and of the Council.

[49] See page ... of this Official Journal.

2. Where reference is made to this paragraph, the advisory procedure laid down in Article 3 of Decision 1999/468/EC shall apply, in compliance with Article 7(3) thereof.

Article 9

To ensure that the Programme can be flexibly adapted to technological developments, pilot projects shall be implemented in the fields defined in the Annex.

In this task the Commission may consult Technical Consultation Groups. These shall be composed of professionals from the various sectors of the audiovisual industry, appointed by the Member States and chaired by a representative of the Commission. The Technical Consultation Groups shall submit their reports to the Commission, which shall take the utmost account of them.

Article 10

1. The Programme shall be open to the participation of the associated countries of Eastern and Central Europe in accordance with the conditions laid down in the association agreements or their additional protocols relating to participation in Community programmes concluded or to be concluded with those countries.

2. This Programme shall be open to the participation of Cyprus, Malta, Turkey and those EFTA countries which are parties to the EEA Agreement on the basis of supplementary appropriations, in accordance with the procedures to be agreed with those countries.

3. This Programme shall be open to the participation of the countries which are parties to the Council of Europe Convention on Transfrontier Television other than those referred to in paragraphs 1 and 2, on the basis of supplementary appropriations, in accordance with conditions to be established in the agreements between the interested parties.

4. The opening-up of the programme to the European third countries referred to in paragraphs 1, 2 and 3 may be subject to a prior examination as to the compatibility of their national legislation with the Community acquis, including the second subparagraph of Article 6(1) of Directive 89/552/EEC.

5. The Programme shall also be open to cooperation with other third countries on the basis of supplementary appropriations and the specific arrangements to be established in agreements between the interested parties. The European third countries referred to in paragraph 3 which do not wish to benefit from full participation in the Programme may be eligible for cooperation with the Programme under the conditions set out in this paragraph.

Article 11

1. The Commission shall ensure that measures taken under this Decision are subject to prior appraisal, and to subsequent monitoring and evaluation.

2. After completion of the projects, the Commission shall evaluate the manner in which they have been carried out and the impact of their implementation, in order to assess whether the original objectives have been achieved.

3. After two years of implementation of the Programme, the Commission shall present to the European Parliament, the Council and the Economic and Social Committee an evaluation report on the impact and effectiveness of the Programme based on the results obtained. This report shall be accompanied, if need be, by any adjustment to the Programme, including budgetary adjustments.

4. On completion of the Programme the Commission shall submit to the European Parliament, the Council and the Economic and Social Committee a report on the implementation and results of the Programme.

Article 12

This Decision shall take effect on 1 January 2001.

Done at Brussels,

For the Council

The President

ANNEX

1. MEASURES TO BE IMPLEMENTED

1.1 In the "development of audiovisual works" sector

The object of the programme measures is to provide financial assistance for enterprises in the audiovisual sector submitting:

· proposals supporting the development of audiovisual works presented project by project;

· proposals supporting the development of project catalogues (project packages) as part of a medium-term business strategy.

Selection criteria will chiefly take account of the European and international nature of the projects, and in particular:

· the interest shown by co-producers in the project;

· the project's transnational exploitation potential (as demonstrated by the expression of interest by distributors, the project's production potential, previous productions by the tendering enterprise or its constituent individuals) ;

· the quality and originality of the concept, script or narrative;

· the potential for using new technologies (special effects, computer images, interactivity, etc.).

As a general rule, financial support for development will take the form of conditionally reimbursable loans for individual projects, and non-reimbursable subsidies for project catalogues. The contribution will generally be limited to 50% of project costs, but may be raised to 60% for projects that exploit European cultural diversity.

1.2 In the distribution and dissemination sector

1.2.1 Cinema distribution:

The following lines of action will be implemented in order to achieve the objectives outlined in Article 3:

(a) a support scheme in the form of a conditionally reimbursable advance for distributors of European cinematographic works outside their production territory. The aim of this scheme is:

· to encourage the networking of European distributors in conjunction with international producers and distributors, in order to promote joint strategies for the European market,

· to encourage distributors in particular to invest in adequate promotion and distribution costs for European films, whatever their production budget,

· to assist with the multilingual aspects of European film-making (dubbing, subtitling and multilingual production).

The criteria for selecting beneficiaries may include provisions to distinguish between projects according to their budget category. Special support will be granted for films that exploit European cultural diversity.

(b) a system of "automatic" support for European distributors proportional to the number of seats sold for non-domestic European films in countries participating in the programme, up to a limit per film and adjusted for each country. This type of support may be used by distributors only for investment in the following:

· the acquisition of non-domestic European films;

· editing costs (copying, dubbing and subtitling), promotion costs and publicity costs for non-domestic European films.

Reinvestment arrangements will provide for a Community contribution of over 50% (but not more than 60 %) of project costs, particularly for investment in the production stage and in films exploiting European cultural diversity.

(c) a system to assist European companies specialising in the international distribution of cinema films (sales agents) according to their performance on the market over a given period. This type of assistance may be used by international distributors only for investment in costs arising from the promotion of new European works on the European and international markets.

(d) appropriate assistance to encourage operators to screen a significant proportion of non-domestic European films in premiere cinemas for a minimum screening period. The support granted to each cinema will be determined according to the number of cinema seats sold for non-domestic European films during a reference period. Support should, in particular, contribute to measures to educate and raise awareness amongst young cinema-goers. Support will also be granted for the creation and consolidation of networks of European operators running joint schemes to encourage such scheduling.

(e) a support scheme for the production of international soundtracks (music and effects) for European cinematographic works. The support granted will be determined according to the production budget.

1.2.2 Distribution of off-line European works.

This is understood to mean the distribution of European works on media intended for private use.

Automatic support: a system of automatic support for editors and distributors of European cinematographic works on media intended for private use (e.g. videocassettes, DVD, DVD-Rom) according to market performance over a given period. The support granted may be used by distributors only for investment in the following:

· the costs of editing and distributing new non-domestic European works in digital form; or

· the costs of promoting new non-domestic European works in non-digital format.

This system is designed to:

· encourage the use of new technologies in the production of European works intended for private use (production of a digital master for use by all European distributors);

· encourage distributors in particular to make adequate investment in the costs of promoting and distributing non-domestic European films and audiovisual works;

· assist with multilingual European productions (dubbing, subtitling and multilingual production).

1.2.3 Television broadcasting:

Encourage independent producers to produce works (feature films, documentaries and animated films) involving at least three broadcasters in several Member States belonging to different language zones.

The criteria for selecting beneficiaries may include provisions that distinguish between projects by budget category. Special support will be granted for audiovisual works that exploit European heritage and cultural diversity.

1.2.4 Distribution of European works on-line:

This is taken to mean the distribution of European works on-line via advanced distribution services and new media (Internet, video-on-demand, pay-per-view). The aim is to encourage the European audiovisual industry to adapt to developments in digital technology, particularly as regards advanced on-line distribution services.

Introduction of incentives to digitise works and create promotional and publicity material in digital form, so encouraging European companies (suppliers of on-line access, special-interest channels, etc.) to create catalogues of European works in digital format for exploitation via new media.

1.3 Promotion

1.3.1 In the field of promotion and market access:

The programme measures aim to:

(a) improve the conditions governing access by professionals to the European and international markets via specific technical and financial support schemes as part of events such as:

· the main European and international cinema markets;

· the main European and international television markets;

· special-interest markets, particularly for animated films, documentaries, multimedia and new technologies.

(b) encourage the creation of a database on catalogues of European programmes.

To this end, the Commission is encouraging the networking of operators at European level, essentially by supporting joint initiatives involving national promotional bodies.

Criteria for selecting projects will principally take account of the following:

· the European dimension,

· the quality of professional services (producers, distributors, broadcasters, sales agents),

· the expertise of service providers and operators in the field of promotion.

Support will generally be limited to 50% of project costs.

1.3.2 In the festivals field:

The programme measures aim to:

· support joint audiovisual festivals that screen a significant proportion of European works;

· encourage joint projects with a European dimension involving audiovisual events from at least eight Member States, with a common action plan to promote European audiovisual works and their movement.

Particular attention will be paid to festivals which help to promote works from Member States or regions with a low audiovisual production capacity and works by young European producers, and which establish a policy for monitoring the distribution of the European works featured at the festivals.

Priority will be given to projects from networks which encourage lasting cooperation between events.

Support will generally be limited to 50% of project costs.

1.3.3 Activities to promote European productions:

To encourage professionals, in close association with the Member States, to organise activities to promote European audiovisual and cinema productions intended for the general public.

1.4 Pilot projects

The Commission will implement pilot projects in the following areas:

- conservation and exploitation of the cinematographic heritage, by encouraging partnerships between operators in the cinematographic sector and public or private bodies;

- digitisation of European audiovisual programme archives;

- networking the owners of rights to catalogues of European audiovisual works;

- scheduling of European audiovisual works on special-interest channels in digital format;

- creation of a suitable environment for developing and disseminating new advanced on-line distribution services.

Where appropriate, the Commission may approach the technical consultation groups for assistance.

2. IMPLEMENTATION PROCEDURE

2.1 Approach

In implementing the programme, the Commission will work closely with the Member States. It will also consult the partners concerned and ensure that the participation of professionals in the programme reflects European cultural diversity.

2.2 Funding

2.2.1 Community contribution

Community funding will not exceed 50 % of the cost of the planned measures (other than in the cases expressly provided for in the Annex, where a higher ceiling applies) and will be granted in the form of advances or conditionally reimbursable loans. For multilingual support, the Community contribution will be in the form of subsidies.

2.2.2 Prior appraisal, monitoring and subsequent evaluation

Prior to approving a request for Community support, the Commission will carefully evaluate it to check that it complies with this Decision and with the conditions set out in points 2 and 3 of this Annex.

Requests for Community support must include the following:

· a financial plan setting out all the project funding components, including the financial support requested from the Commission;

· a provisional work timetable;

· any other relevant information required by the Commission.

2.2.3 Financial provisions and control

The Commission shall set out the rules on commitments and payments for the measures undertaken pursuant to this Decision, in compliance with the appropriate provisions of the financial regulations.

2.3 Implementation

2.3.1 The Commission shall implement the programme. It may, to this end, call upon consultants and technical assistance offices to be selected, after a call for tenders, on the basis of their expertise in the sector. The Technical assistance shall be financed by the programme's budget. The Commission may also conclude, in accordance with the procedure referred to in Article 8(2), partnerships for ad hoc operations with specialist bodies such as Audiovisual Eureka, in order to implement joint measures that meet the programme objectives in the field of promotion.

The Commission will make the final selection of the beneficiaries of the programme and decide on the financial support to be granted, in accordance with Article 7.

In order to execute this programme and, in particular, evaluate the projects benefiting from the programme funding and networking activities, the Commission shall draw on the know-how of recognised audiovisual experts in the fields of development, production, distribution and promotion.

2.3.2 The Commission shall take the necessary steps to provide information on the opportunities offered by the Programme, and shall ensure its promotion.

The Commission and the Member States shall take the necessary steps, by continuing with the activities of the network of MEDIA Desks and Antennae and ensuring that their professional skills are enhanced, in order to:

· publicise and promote the programme;

· encourage maximum participation in the programme's activities by professionals;

· assist professionals with the presentation of projects in response to calls for proposals;

· foster transborder cooperation between professionals;

· liaise between the various support bodies in the Member States with a view to ensuring that programme activities complement national support measures.

FINANCIAL STATEMENT

1. TITLE OF OPERATION

Programme to encourage the development, distribution and promotion of European audiovisual works

2. BUDGET HEADING INVOLVED

B 3 2010.

3. LEGAL BASIS

Article 157 of the Treaty establishing the European Community

4. DESCRIPTION OF THE OPERATION

4.1 Overall objective

The aim of the programme is to remedy the shortcomings of the European audiovisual and multimedia content industries, i.e. the inadequate movement of non-domestic European works and the chronic shortage of investment, both upstream (project development and continuous vocational training) and downstream (distribution and promotion) in terms of production volume and competition from the United States.

The overall objectives are as follows:

- to enhance the competitiveness of the European audiovisual industry, particularly on the European market, by supporting the development of projects with genuine distribution and/or dissemination potential,

- to help independent European production and distribution companies (mostly small and medium-sized enterprises) by encouraging their networking,

- to help European content industries consolidate their market position in the new audiovisual media sector,

- to encourage the movement of audiovisual works within the European market and their promotion outside the Union,

- to enhance the potential of countries or regions with a low audiovisual production capacity and/or with a limited geographic and linguistic area,

- to ensure that European linguistic and cultural diversity is respected,

- to exploit the European audiovisual heritage.

4.2 Period covered by the operation and arrangements for renewal

The Media Plus Training programme covers the period from 1 January 2001 to 31 December 2005. Its possible renewal will be the subject of a new decision-making process based on the provisions of the Treaty.

5. CLASSIFICATION OF EXPENDITURE OR REVENUE

5.1 Non-compulsory expenditure

5.2 Differentiated appropriations

5.3 N/A

6. TYPE OF EXPENDITURE OR REVENUE

The financial support allocated under the development heading will generally take the form of conditionally reimbursable loans for individual projects and non-reimbursable subsidies for catalogues of projects. The contribution will generally be limited to 50% of the cost of projects, but may be raised to 60% for projects that exploit European cultural diversity.

Financial support allocated under the distribution heading will generally take the form of conditionally reimbursable loans for selected systems (cinema and television) and non-reimbursable subsidies for automatic systems (cinema and video). Non-reimbursable subsidies will also be granted to assist sales agents and cinemas, to help with the production of international soundtracks and for catalogues of works in digital format. The contribution will generally be limited to 50 % of the cost of projects, but may be raised to 60% for projects that exploit European cultural diversity.

Financial support allocated to promotion and pilot projects will generally take the form of non-reimbursable subsidies.

7. FINANCIAL IMPACT

7.1 Method of calculating the total cost of the operation

Amounts were arrived at using two sources of information:

- The data available from the implementation of the MEDIA II Programme (databases by sector of activity and action line). These figures are based on actual dossiers submitted by tenderers (representing at least half of the professionals in the sector).

- Data contained in the following documents: proceedings of conferences on the audiovisual sector (Birmingham Conference on the European Audiovisual Industry, the Helsinki Forum on Audiovisual Policy), report by the High-level Group on Audiovisual Policy (Oreja Group), the mid-term assessment of the MEDIA II Programme (BIPE), Commission documents (Green paper on convergence, Communication on the next steps in audiovisual policy), etc. These documents - containing macro-economic analyses - include figures on the sectoral requirements of the European audiovisual industry.

Reimbursements of the loans granted under the programme, and of those for measures implemented under the MEDIA programme (1991-95) and the MEDIA II (1996-2000) programme, are allocated to the requirements of the MEDIA Plus programme.

Development

Breakdown and quantified forecast for the development sector (EUR million)

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Distribution

Breakdown and quantified forecast for the distribution sector (EUR million)

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Promotion

Breakdown and quantified forecast for the promotion sector (EUR million)

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Pilot projects

Breakdown and quantified forecast for the pilot projects sector (EUR million)

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7.2 Itemised breakdown of cost

Breakdown and quantified forecast for the pilot projects sector (EUR million)

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Actions vis-à-vis the sector

Commitment appropriations (EUR million) (current prices)

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7.3 Operating costs included in Part B of the budget

Horizontal costs

Commitment appropriations (EUR million) (current prices)

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In order to conduct a selection among the proposals and to assist in the follow-up, the Commission envisages calling upon external technical and/or administrative assistance. In the framework of the MEDIA II and MEDIA I programmes, the Commission was assisted by TAOs (Technical Assistance Offices) with expertise in the areas covered by the programme. The type of external technical and/or administrative assistance used for the implementation of the present programme will be determined in accordance with the guidelines established by the Commission. If TAOs were to be used for the establishment of the present programme, the College will be duly informed in accordance with the Vademecum concerning Technical Assistance Offices.

7.4 Indicative schedule commitment/payment appropriations

Commitment appropriations (EUR million)

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8. FRAUD PREVENTION MEASURES

Programme beneficiaries are selected according to a call for proposals procedure published several times a year in the Official Journal of the European Communities. Before approving a request for Community support, the Commission carefully evaluates it to check that it complies with the Council Decisions and the terms of the call for proposals.

Requests for Community support must include the following:

- a financial plan detailing all the components of project funding, including the financial support requested from the Commission;

- a provisional work timetable;

- any other relevant information required by the Commission as set out in the technical specifications of the call for proposals.

For proposal selection, the Commission is assisted by a technical assistance office with expertise in the fields covered by the Programme. Projects that are deemed eligible are then submitted to independent experts and to the MEDIA Committee, which consists of representatives of the Member States participating in the programme, before the final decision is taken by the European Commission.

The payment of financial contributions is contingent upon the production of detailed supporting documents, prior to payment, and of activity reports. It is likewise contingent upon on-site checks (audits) and central monitoring.

Furthermore, various bodies (Court of Auditors, Financial Control and authorising officer) run checks on the bodies managing the measures and on the beneficiaries.

9. ELEMENTS OF COST-EFFECTIVENESS ANALYSIS

9.1 Specific and quantified objectives, target population

The objective in the development sector is to remedy chronic under-investment in the European industry, particularly in the development phase of projects with commercial potential on the European market. The objective is also to help independent companies consolidate their presence and set up networks.

The objectives of development aid must be:

- in the short/medium term, to inject additional funding into enterprises running fiction, animation or documentary projects using new technologies;

- in the longer term (and in conjunction with training), to bring about a change in professional practices in terms of greater concentration on project development.

Development aid must also encourage

- the most dynamic independent producers to implement genuine commercial development strategies, and

- encourage entrepreneurs to acquire the critical mass that will allow them to increase investment in the development of European projects as a result of increased turnover, catalogue receipts and operating results.

The objectives of distribution aid must be:

In the short term:

- to improve the access of European works to the exploitation modes already available within Europe and encourage the movement of European works within the Single Market;

- to improve public access to non-domestic European works (cultural diversity), particularly by providing assistance for multilingual productions;

- to enhance the prominence, visibility and profitability of these works in various formats (cinema, video and DVD, television);

- to encourage national and international distributors (sales agents) to increase investment in individual European works (publicity, promotion);

- to encourage the distribution sector (national and international) to increase investment in production, particularly the production of non-domestic works.

In the medium term:

- to improve the mobility and profitability of European works on the European and world markets, on all consumer-accessible media;

- to enhance the competitiveness of distribution companies (cinema, video, TV) and the compilation and exploitation of European copyright catalogues;

- to develop networking and joint strategies at European level by strengthening the links between distribution and production;

- to increase the production of works intended for the European market (distribution-led production) whilst respecting linguistic and cultural diversity;

- in cultural terms: to develop the European public's knowledge and appreciation of works from other European countries, thus strengthening European cultural identity in all its diversity.

The objectives of promotional assistance must be:

- to encourage the presence of European professionals and audiovisual programmes on both traditional markets and the emerging European and international markets;

- to encourage the participation by professionals and European audiovisual programmes in all measures to promote the movement, exchange or sale of European programmes inside and outside Europe;

- to encourage the scheduling of European audiovisual works at European and international events and/or festivals;

- to encourage the networking of professionals and of national associations at European level in order to optimise resources.

Sector // Target population

Development // - European independent production companies (SMEs)

- Fiction

- documentaries

- Animation

- Multimedia

Distribution // - European film distributors (cinema, video, DVD, etc.)

- Independent European cinema and television producers

- European sales agents

- Owners of copyright on works (catalogues): distributors etc.

- Special-interest channels

- Independent European operators

Promotion // - European and international audiovisual markets

- International audiovisual festivals featuring a significant proportion of European works

- European associations of international audiovisual festivals featuring a significant proportion of European works

- European audiovisual operators

- International audiovisual events to promote European works and talent

9.2 Grounds for the operation

Need for a contribution from the Community budget, particularly in view of the principle of subsidiarity.

The support programme in question is in line with the European Union's audiovisual policy.

It operates on the basis of the principle of subsidiarity, complementing initiatives at national level. It underpins and complements measures taken at national level. It meets the objectives set out in the Treaty, particularly Article 157 thereof, i.e.:

- speeding up the adjustment of industry to structural changes;

- encouraging an environment favourable to initiative and to the development of undertakings throughout the Community, particularly small and medium-sized undertakings;

- encouraging an environment favourable to cooperation between undertakings;

- fostering better exploitation of the industrial potential of policies on innovation, research and technological development.

Choice of operational arrangements

The incentive here is financial, the aim being to mobilise additional investment from industry and bring about a significant increase in the volume of activity. This market-based approach will stimulate activity.

National state aid is very much geared towards production, whilst MEDIA aid is deployed for the development of projects and the distribution of works. National aid in the production sector accounts for 59% of total national aid, compared with 5% for distribution and 6% for exploitation.

By mobilising capital (under the MEDIA II programme), Community financial intervention will have an average multiplier effect of 4.19 in development and 7.2 in distribution.

- Main unknowns that may affect the specific results of this action: this is a pioneering, high-risk industry.

9.3 Monitoring and evaluation of the operation

Performance indicators:

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The Commission monitors the most pertinent indicators throughout the implementation of the programme. For the contracts established with the Commission, the beneficiaries of financial support will have to provide the relevant information so as to allow the continuous, half term and ex-post evaluation.

Details and frequency of planned evaluation:

The Commission will draw up two Programme evaluation reports.

Mid-term report: the first report will be drawn up two years after the start of the programme. The object of this report is to provide an initial assessment of the results obtained at the half-way stage so that any changes or adjustments that are deemed necessary may be made for the second half of the programme. To this end, the Commission may draw on the assistance of outside experts, who will be selected on the basis of their expertise following a call for tenders. The Commission report will be submitted to the European Parliament, the Council and the Economic and Social Committee.

Final Report: the second report will be drawn up at the end of the five-year programme. The object of this report is to assess the comparative results of support systems in the light of the programme objectives. As with the mid-term report, the Commission may call on outside consultants for assistance. The final report will be submitted to the European Parliament, the Council and the Economic and Social Committee.

Furthermore, in the light of the experience acquired under the MEDIA II Programme, the Commission plans to continue its practice of auditing beneficiaries (around 30 per year) in order to check that Community funds are being used properly. The results of audits will form the subject of a written report.

Evaluation of the results obtained:

Information providing a measure of the performance, results and impact of the Programme will be taken from the following sources:

- statistical data compiled on the basis of the information from application dossiers and the monitoring of beneficiaries' contracts;

- audit reports on a sample of Programme beneficiaries (30 per year);

- consultations with MEDIA Desks and Antennae and on national markets;

- consultations with experts and institutional bodies (national and international professional associations);

- consultations with audiovisual professionals and with specialist training bodies.

10. ADMINISTRATIVE EXPENDITURE (PART A OF SECTION III OF THE GENERAL BUDGET)

This section must be sent simultaneously to DG BUDG and DG ADMIN; the latter will then forward it to DG BUDG with its opinion.

Actual mobilisation of the necessary administrative resources will depend on the annual decision by the Commission on the allocation of resources, particular account being taken of the additional staff and amounts authorised by the budgetary authority.

10.1 Impact on the number of posts

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The administrative resources required may actually be mobilised in the framework of the annual Commission decision on the allocation of resources, taking into account in particular additional resources authorised by the budgetary authority.

Accordingly, DG EAC should take into account the risk that the budget authority, after the Council having adopted the legislative proposal in question, does not grant the Commission the necessary additional human resources. In that case, if no redeployment from other Commission services were possible, DG EAC would have to meet the related needs in term of human resources by internal redeployment exclusively.

10.2 Overall financial impact of the additional human resources

(EUR)

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Amounts show the total cost of additional posts for the entire duration of the operation if it is of a specific duration, or for a period of 12 months if it is of unspecified duration.

10.3 Increase in other management expenditures resulting from the action, notably expenditures for meetings and expert panels (EUR)

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The expenses relating to heading A-7 appearing in point 10 will be covered by the overall credits for DG EAC.