Opinion on the Green Paper - Strategy options to strengthen the European programme industry in the context of the audiovisual policy of the European Union (94/C 393/05)

On 14 April 1994 the Commission decided to consult the Economic and Social Committee, under Article 198 of the Treaty establishing the European Community, on the Green Paper - Strategy options to strengthen the European programme industry in the context of the audiovisual policy of the European Union.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 28 July 1994. The Rapporteur was Mr Flum.

At its 318th Plenary Session (meeting of 14 September 1994), the Economic and Social Committee adopted the following Opinion by a majority vote in favour and one vote against.

1. Introduction

1.1. This Green Paper 'looks at the future of one specific industry: the European film and television programme industry' because, as stated in the Foreword, 'films and television programmes (are) prime vectors of European culture and (provide) a living testimony to the traditions and identity of each country.' The Green Paper is intended to provide the basis for 'wide-ranging, in-depth consultations'. The essential problem is summed up as follows:

'How can the European Union contribute to the development of a European film and television programme industry which is competitive on the world market, forward-looking and capable of radiating the influence of European culture and of creating jobs in Europe?'

1.2. The precursors of this Green Paper were the White Paper on 'Growth, competitiveness, employment - the challenges and ways forward into the 21st century' [COM(93) 700 final of 5 December 1993], the draft Council Resolution on 'Digital video broadcasting - a framework for Community policy' [COM(93) 557 final of 17 November 1993], the proposal for a European Parliament and Council Directive on the use of standards for the transmission of television signals () and the Green Paper on pluralism and media concentration in the Internal Market - an assessment of the need for Community action [COM(92) 480 final of 23 December 1992].

1.3. Two reasons are given for confining the Green Paper to the development of the European film and television programme industry:

- because, in the words of the Green Paper, film and television are 'the prime vectors of culture' and 'as living testimony to the traditions and identity of each country they deserve encouragement';

- because the Green Paper sees the programme industry as 'a strategic element in the development of the audiovisual sector', making it imperative to keep a close watch on trends in this area: 'As recent developments show, the most powerful operators on the world market (equipment manufacturers and cable and telecommunications operators) are seeking to control the most important programme catalogues'.

2. Preliminary comments

2.1. The threat to programme diversity and freedom of expression posed by the most powerful operators on the world market and possible European counter-strategies, is already evident at this point, but this threat is then glossed over: the Green Paper sticks to discussing the economic consequences of the various 'strategic options' it presents. At the same time, no account is taken of the influences and divergent interests of worldwide media groups when defining the aims of the European strategy for the development of the programme industry. Rather, the Commission assumes that 'the entrance of new actors, with greater financial resources, on the audiovisual stage opens up new prospects in terms of new investments and new outlets for the European programme industry.' And it refers to the rather optimistic forecasts contained in the White Paper mentioned above that, with the increased growth in the European audiovisual industry, 'job creation could be of the order of two million by the year 2000'.

2.2. The Green Paper gives a more realistic analysis of the obstacles to the development of a truly European programme industry. Language barriers, partitioned markets and failure to use new technologies to the full may hinder the development of a European programme industry. This is why the Commission feels that the European Union must 'mobilize its resources to invest in the development of a programme industry capable of competing at home and on the world market, acting as a vehicle for its culture, creating jobs and generating profits. What is needed, therefore, is a medium/long-term policy with the ultimate aim of making the industry profitable again in an open, dynamic world market'.

2.3. Although the Green Paper sees the development of a competitive European programme industry as a prerequisite for maintaining 'cultural diversity', there is no mention of safeguarding the specific cultural characteristics of European film and TV productions in the 'Strategy options to strengthen the programme industry'. It has long been an open secret that promoting such programme industries from a purely commercial angle does nothing to advance cultural diversity, but leads to productions which promise the highest possible ratings and which are more and more alike. This is in itself sufficient to make it essential to preserve and develop licence-fee-financed public-service productions in Europe: public-service broadcasters have produced a demonstrably higher proportion of cultural programming than their commercial competitors. This important point is also ignored in the 'Strategic Options'.

2.4. After describing the existing instruments - the 'television without frontiers' Directive establishing the general framework for free movement of television broadcasting services, the promotion of independent European productions, the MEDIA programme - the Commission turns to the 'options for the future'. It does not set out to provide 'an inventory of practical measures to be proposed at European level. Instead, the Commission sees the options discussed as a basis for discussion, principles that should govern action by the Union and priority strategies that could be jointly defined'. Nevertheless, the Commission believes that 'urgent, vigorous action' is required to allow European industry to benefit from the free play of market forces. This in turn requires 'removing barriers in the single market', as the Commission categorically states, drawing on its White Paper in which it points to the worldwide trend towards liberalization and deregulation, saying that this applies equally to the audiovisual sector. In concrete terms, 'the development of specific national rules for the audiovisual industry must not be allowed to interfere with the functioning of the single market'. In the same breath, the Commission bemoans the lack of transparency and acknowledges that 'globalization of the industry makes it increasingly difficult to analyze the market penetration strategies of international audiovisual or multimedia groups'.

3. General comments

3.1. The Commission's analysis does not prompt it to comment on ways of limiting the market power of international groups. The Commission's chief concern is to improve market transparency, and so it calls for 'cooperation between the Commission and national authorities responsible for applying the rules of competition' and 'tighter checks on the application of Community law':

'The implementation and enforcement of common rules and the imposition of sanctions in the event of non-compliance are vital for the harmonious development of broadcasting in Europe. Differences between Member States in the application of the rules would distort competition in the system of free exchange of television programmes provided for by the 'television without frontiers' Directive.'

3.2. Strategies for restricting market share also fall foul of the Commission's objective of undistorted competition.

3.3. The Green Paper ends with a series of questions aimed at achieving greater transparency and creating financial incentives. The Commission advocates a 'change in attitude' and to this end intends to supplement the Green Paper with an extensive hearing of industry representatives 'to canvas the views of individual operators and organizations representing the industry at European level'. In answering these questions and in the course of the hearings it is essential that proposals for restricting power over the media in Europe are discussed. Pan-European rules should not be based on the lowest common denominator.

4. Specific comments

4.1. By concentrating on the unimpeded operation of the internal market and by endorsing the trend in the service sector towards worldwide liberalization and deregulation, the Green Paper deliberately steers clear of the possible social consequences of unbridled competition in the audiovisual field. At the same time, films, television and radio programmes cannot be compared with other services because, in essence, they represent the cultural identity of European countries. Unrestricted competition would undoubtedly lead to the European market being dominated by a small number of mainly non-European media groups, thus jeopardizing this cultural identity.

4.2. For this and other reasons, the European Union took steps in December 1993 to ensure that the GATT world trade agreement excluded the audiovisual sector in order to preserve Europe's cultural autonomy and diversity. The Green Paper argues that action to create a common information area should be speeded up in response to technological advances - especially the imminent process of digitalization and its consequences for the programme industry. Yet, by the same token, it should be pointed out that the process of concentration in the media sector is also forging ahead, with an urgent need for regulation. In any event, this aspect cannot simply be put on ice until the Commission has reached concrete conclusions based on the opinions of the European Parliament, the ESC and other institutions on the Green Paper on 'Pluralism and media concentration'.

4.3. Moreover, neither the lessons gained from experience with the 'Television without frontiers' Directive of October 1989, nor recent political developments have prevented a retreat to a position where industrial policy is the sole issue. The quota arrangements for European programming, which the television Directive sought to achieve, have been ignored by commercial broadcasters. The ESC feels that these developments should have sounded alarm bells for the European Union's media policy, triggering measures to combat media concentration in Europe, as the ESC has proposed over and over again.

4.4. The Economic and Social Committee notes with interest the Commission's target of creating 2 million jobs in the audiovisual sector by 2000.

To allow this trend to be monitored the Committee calls on the Commission to submit an annual progress report.

The ESC emphasizes that statistics should include only newly created jobs and not shifts from one media sector to another.

4.5. Yet the ESC cannot ignore the fact that the numerous comments and suggestions it has submitted in recent years concerning the future prospects for a democratic, European media culture have yet again been ignored. In any case, consultation prior to publication of the Green Paper was limited to representatives of the industry and to users, even though the ESC had repeatedly expressed its willingness to conduct preliminary consultations.

5. Draft responses to the questions raised in the Green Paper on Strategy options to strengthen the European programme industry in the context of the audiovisual policy of the European Union.

5.1. How can the application of Community law and its monitoring be made more effective ()?

For any kind of monitoring on the application of Community law to be effective, the ownership status of audiovisual media in Europe must be transparent. With the technical possibilities opened up by digitalization and the virtually unrestricted opportunities it provides for duplicating programmes, there is a greater need to curb the processes of increasingly large-scale media concentration. Compulsory disclosure of ownership status in the audiovisual field must therefore be enshrined in Community law, along with specific limits on involvement in this field (cf. ESC Opinion on the Green Paper on pluralism and media concentration in the internal market - an assessment of the need for Community action, of 22 September 1993).

5.2. How can the diversity of services be taken into account? How can intra-European distribution of programmes be encouraged? Are clearer common definitions needed? Should preference be given to incentives to invest in the production of programmes and the acquisition of rights rather than mechanisms based on broadcasting time ()?

The diversity of services can be fostered as much by restricting concentrations at both national and European level, as by introducing specific measures to promote diversity. Intra-European distribution can be achieved by encouraging supranational broadcasting companies such as ARTE. To this end, public structures would be helpful if only because the cost of broadcasting multilingual programmes would presumably deter commercial operators. In addition, Europe-wide projects such as MEDIA could have a positive effect on the development of European programme structures and production processes.

It would make sense in several respects, and indeed it would be necessary, to lay down common definitions, for instance, to limit media concentrations, as well as to define the conditions for the provision of incentives. Incentives for investment in programmes should be channelled into promoting the production of culturally valuable programmes or acquiring the rights to these.

5.3. Should Community rules on media time scales be retained, given the need to maximize earnings and encourage the emergence of new formats and services? Should existing rules be amended and extended to forms of exploitation other than broadcasting ()?

As regards media time scales, the rules on exploitation need to be radically revised, given the wide range of interests and dependencies in film production and the imminent proliferation of programme channels in the wake of digitalization.

5.4. How can the relationship between the development of new types of service and the development of the European programme industry be optimized? Should incentives be developed for new ways of transmitting audiovisual programmes (notably those on individual demand, as opposed to broadcasting services in the strict sense - 'point to multipoint' communication)? What would be the appropriate arrangements ()?

The ESC feels that incentives for new ways of transmitting audiovisual programmes - especially by individual demand - are unnecessary. Not every innovation in the audiovisual sector needs to be supported, particularly when such innovations merely provide additional facilities, rather than plugging identifiable gaps in the communications field. On the other hand, there is quite clearly a need to lay down rules at the start in order to prevent large media concerns from extending their growing dominance to this sector as well.

5.5. Should the horizontal approach to financial incentives be continued, covering all phases of the creation/production/distribution/exploitation process, or should funds be concentrated on a number of priority phases to apply leverage to the process as a whole? And if so, on which ()? In particular: How can the development of projects be improved in a European context? How can pan-European distribution of programmes be encouraged and the compartmentalization of national markets be brought to an end? How can high-quality dubbing and subtitling be promoted? How can investment be encouraged? How can training be geared to the market and new information technologies?

Whether a horizontal approach to financial incentives is appropriate for the entire range of audiovisual activity in Europe depends on the needs identified in particular areas. Both the technological and financial development prospects would have to be examined, with particular attention paid to promoting initiatives which are not simply calculated attempts by large media concerns to fill any last gaps in the market.

Pan-European distribution of programmes can mainly be encouraged through intensive information campaigns about products in the major - or, if possible, all - European languages. Creating a pool of translators for this purpose would be one of the most important investments and could at the same time set new quality standards for dubbing. This could be financed through levies on TV advertising, especially as these levies would benefit all concerned in the long run. The Committee feels that the Commission's efforts in this area have so far been inadequate.

5.6. Should the project-by-project (creation, production, distribution or exploitation) approach be continued for financial incentives? or, should priority be given to companies, taking the whole range of their activities into account ()?

The claim that providing incentives to companies, taking the whole range of their activities into account, sparks growth could be a dangerously incorrect conclusion. Economic history shows clearly that giving everyone a slice of the incentives cake is not nearly as effective as providing specific financial incentives for individual projects.

5.7. The mechanisms which must be applied in order to bring about changes in structures at European Union level must have a genuine European dimension and be adequately funded in order to provide the 'critical mass' required to achieve the objectives within a reasonable length of time ().

See the suggestions in point 5.5 above made in response to the questions concerning pan-European distribution of programmes. The same precondition applies for any other kind of incentive.

5.8. How can the European Union cater for the special problems of countries with low production capacity or a restricted language area?

Should they be catered for under the mechanisms applicable across the board or should specific mechanisms be developed? (If so, what form should they take?) ().

The Economic and Social Committee supports all additional measures to ensure that cultural diversity and specificity are secured and maintained in countries with low production capacity or a restricted language area.

The cultural importance of the audiovisual sector referred to by the Commission cannot be excluded from the European Union's area of competence as a mere product of market mechanisms.

In its recent Communication on Europe's way to the information society - an action plan [COM(94) 347 final], the Commission for the first time stresses, as suggested by the ESC, that films and television and radio programmes are cultural products which cannot be treated like other products ()().

5.9. With an eye to the development of the audiovisual market in the countries of Central and Eastern Europe: Should action by the European Union be confined to development and reconstruction programmes for industry in general (and hence, potentially, the audiovisual industry)?

or

Should the Community's financial incentives be extended to professionals in these countries?

or

Should specific instruments be developed to encourage initiatives by Community companies in these countries in a spirit of partnership ()()?

Community financial incentives should be extended to professionals in the countries of Central and Eastern Europe, not least because such exchanges would benefit programme diversity in EU countries. This does not preclude the encouragement of specific initiatives by Community companies in a spirit of partnership, provided that these companies put up an adequate proportion of the financing themselves.

5.10. Should a cooperative framework for exchanges and thought be set up with a view to improving national systems of support for the programme industry and promoting their convergence?

What should be the priority themes?

Should such an exercise promote: common priorities in national support systems; a gradual move towards a European dimension; a debate on funding arrangements ()()?

For the reasons outlined above, the ESC categorically advocates setting up a cooperative framework for exchanges and thought to promote the convergence of national systems of support. A key issue here should be the question of introducing a pan-European levy system, as outlined in point 5.3.2(ii) of the Green Paper.

The objective of any such reflection should be to determine specific measures for providing financial support at Community level and beyond for elements of European culture in audiovisual programmes. The time is ripe for such measures.

Done at Brussels, 14 September 1994.

The President

of the Economic and Social Committee

Susanne TIEMANN

() OJ No C 341, 18. 12. 1993.

() Green Paper - questions, p. 37.

() Green Paper - questions, p. 39.

() Green Paper - questions, p. 40.

() Green Paper - questions, p. 41.

() Green Paper - questions, p. 43.

() Green Paper - questions, p. 44.

() Green Paper - questions, p. 45.

() Green Paper - questions, p. 57.

() See COM(94) 347 final, p. 20.

() Green Paper - questions, p. 47.

() Green Paper - questions, p. 51.