gtJ3ïf*pj COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(93) 462 final 
Brussels, 29 October 1993 
COMMUNICATION FROM THE COMMISSION 
on the action programme to promote the development of the 
European audiovisual industry (MEDIA) 
(1991-1995) 
Proposal for a 
COUNCIL DECISION 
amending Council Decision 90/685/EEC concerning the 
implementation of an action programme to promote the development 
of the European audiovisual industry (MEDIA) 
(1991-1995) 
(presented by the Commission) 
rat a?Sy»rafajm, * 
W>"1&/ 
- A ~ 
Contents 
1. INTRODUCTION 
2. SUMMARY OF THE EVALUATION OF THE MEDIA PROGRAMME 
2.1 Operations affecting industrial structures 
2.1.1 Setting up crossfrontier structures 
2.1.2 Balancing market forces 
2.1.3 Stimulating new financing structures 
2.1.4 Promoting structural coherence in the audiovisual 
chain 
2.2 Lines of action in different branches of the industry 
2.2.1 Scale of operations 
2.2.2 Quality of operations 
2.2.3 Relevance of projects 
2.2.4 Sectoral impact of operations 
2.3 Effects of the economic context 
3. BUDGET IMPLEMENTATION 
4. COLLABORATION WITH NON-MEMBER COUNTRIES AND AUDIOVISUAL EUREKA 
4.1 General context 
4.1.1 EEA countries 
4.1.2 Europe agreements 
4.1.3 Bilateral agreements 
4.2 Consequences of the involvement of non-member countries for 
the future of the programme 
4.3 Collaboration with Audiovisual EUREKA 
5. COMMISSION PROPOSALS FOR STRENGTHENING THE PROGRAMME 
5.1 Guidelines 
5.2 Proposals 
5.2.1 Proposals involving amendment of council 
Decision 90/685/EEC 
5.2.2 Adjustments to the programme falling within the 
Commission's executive powers 
5.2.2.1 - Structural operations 
5.2.2.2 - Recentering sectoral activities 
5.2.2.3 - control of project management 
6. GENERAL CONCLUSIONS 
- Proposal for a Council Decision 
(2) 
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1. INTRODUCTION 
On 21 December 1990 the Council adopted a Decision1 on implementation of an 
action programme to promote the development of the European audiovisual 
industry (MEDIA) over the years 1991 to 1995. 
Article 8 of the Council Decision requires the Commission to produce an 
evaluation report on the MEDIA programme after the first two years. The 
Commission based the evaluation on an audit conducted by an independent firm 
and on discussions with the industry, in consultation with the Advisory 
Committee which assists the Commission in implementing the programme. On 
23 July 1993 the Commission adopted the evaluation together with guideline 
remarks,2 to be referred to the Council, Parliament and the Economic and 
Social Committee. 
The conclusions of the evaluation have led to the present proposal to amend 
the Decision of 21 December 1990 with a view to improving the budgetary and 
organizational aspects of the MEDIA programme. Due regard for the principle 
of subsidiarity entail that the purpose of the Community's measures in this 
area should not be to replace but to complement what is being done by the 
authorities in the Member States. 
2. SUMMARY OF THE EVALUATION OF THE MEDIA PROGRAMME 
A short summary of the evaluation will underline the main trends of the 
conclusions from three points of view: 
- the impact of Media on the general structures of the industry in 
accordance with the objectives laid down by the Council; 
- the impact of Media on the various sectors of industry identified by the 
Council; 
- the impact on Media of developments in the general economic context. 
2.1 Operations affecting industrial structures 
The programme supports the economic development of the programme industry in 
expectation of the European audiovisual area. The prerequisite for such 
development is to reinforce industrial structures in line with the 
requirements of the new area. 
1 Council Decision 90/685/EEC, OJ L 380, 31.12.1990, pp. 37-44. 
2 COM(93)364. 
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In many areas the programme has launched industrial structure operations 
directed towards this goal. According to the audit, these are the most 
visible effects of Media and are clearly seen to have the most potential. 
In line with the basic aims of the Council, the structural operations mainly 
entail: 
2.1.1 Setting up trans-frontier structures 
To promote the enlarged market Media fosters cross-frontier cooperation 
between national audiovisual operators. By setting up such networks the 
programme achieves one of its fundamental aims which is to overcome the 
fragmentation of the industry. 
But networking is only a first step towards setting up genuine pan-
Community structures. By re-grouping enterprises Media has already brought 
about a significant increase in the turnover of those concerned. 
There is a general will to achieve restructuring throughout the industry, 
but although this is vital for the European audiovisual industry it requires 
launch capital on which the returns will only be gradual. 
2.1.2 Balancing market forces 
The programme gives priority to independent firms, especially small 
businesses, which compensate for the absence of large companies in key 
areas such as distribution. It practises positive discrimination in favour 
of small businesses in countries with less widely known cultures and 
languages. 
The lion's share of the programme's budget was allocated to these firms and 
their groupings. Priority was given to operators with a genuine development 
potential, in terms both of the ability to innovate and of human resources, 
with a view to developing a solid industrial fabric. The audit clearly 
underlined the advisability of such a selective approach. 
Today, support for small businesses seems all the more important given that 
they tend to be particularly affected by the decline in the economic 
situation. In this context Media should contribute to stabilizing 
precarious situations, in particular by preserving and developing employment 
in line with Community concerns. 
3 -
2.1.3 Stimulating new financing structures 
The programme is not a system of non-repayable subsidies. It provides seed 
capital intended to attract fresh funds to the industry in the form of 
investment structures associating private and public partners. 
The evaluation shows that the programme has a considerable multiplier 
effect: at present Media's contribution to the activities generated by the 
projects is only 24% of the total financial volume, the remainder coming 
from other sources. 
After two years of operation, the average return on investment is still low, 
but in some sectors it is nearly 20%. This shows the effectiveness in 
market terms of cross-frontier financing structures. 
2.1.4 Promoting structural coherence in the audiovisual chain 
The programme seeks an overall approach to the industry and aims to be 
coherent and cover all links in the audiovisual chain. 
Consistency will enable it to ensure economic and commercial follow-up for 
the products generated by the industry at all stages of development. 
As an instrument to enhance the industrial aspects of programmes, Media 
seeks to ensure the best conditions for success, from the drawing board to 
the market. The audit underlines the importance of this aspect which should 
be reinforced through a number of specific financial, economic and 
commercial instruments. 
In the long-term the aim is to make the industry more independent in view of 
the budgetary constraints in the Community so that professionals -
especially in the smaller countries - can benefit fully from the new 
conditions opened up by the single market. 
2.2 Lines of action in different branches of the industry 
Taking the objectives defined by the Council, 19 projects in five main areas 
of action have been developed in the framework of Media. 
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These areas cover: 
- distribution, exhibition and promotion (eight projects): distribution 
and cinema exhibition of films; video distribution: support for 
multilingualism; presence on international markets; distribution of 
independent productions. 
- improvement of production conditions (seven projects): development and 
preproduction of fiction works and documentaries; support for the 
animated film industry; use of new technologies; establishment of a 
"second market". 
- stimulation of investment (one project): guarantee fund. 
- training in business and marketing for professionals (two projects): 
long courses for young producers; training for all categories of 
professionals with specific needs. 
~ development of potential in countries which are small in terms of 
production capacity, geography and language (one project). 
2.2.1 Scale of operations 
In the two years since its inception the programme's potential impact on the 
general structures of the industry can be seen, but it is difficult to make 
a detailed evaluation at microeconomic level. 
The audiovisual industry operates in long time-spans: it takes several 
years to develop a product from initial idea to market release. 
only since early 1993 have all the activities planned by the Council for 
Media been fully operational. Half the projects were set up recently and 
some are still in the launch phase. Funding levels vary considerably, 
depending on the aims and context of the projects. 
Given the differences in scale the impact of Media sectoral projects can 
only be assessed with caution. However, certain aspects of industrial 
strategy must be based on these assessments. 
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2.2.2 Quality of operations 
The overall image is positive. On a scale drawn up by the auditor fourteen 
out of eighteen projects1 were rated "excellent" or "very good", three 
"good" and one "fair". This judgment is borne out by professionals who 
perceive the programme as "an effective catalyst for improving the 
competitiveness of the industry". 
The projects are generally seen as an appropriate response to market 
requirements. Most of the projects are perceived as achieving their goals 
within the limits of available resources. 
2.2.3 Relevance of projects 
Although every sectoral project can be justified from the professional's 
point of view, some reorganization seems advisable. Given the limited 
budget of the programme, it would be wise to concentrate part of the effort 
on projects to which more priority tends to be given in terms of industrial 
strategy. They include the following: 
- in preproduction (development of fiction works, documentaries, animated 
films and programmes using new technologies); 
in distribution, dissemination and promotion (cinema, television, video, 
multilingualism, international markets); 
in vocational training, on which the Commission will place more stress to 
respond in terms of jobs to the development potential of the industry. 
The concentration of effort, which it is anticipated will strengthen the 
programme, must be accompanied by the integrated management of projects, 
their activities and their impact on the market. 
1 One project could not be assessed. 
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2-2.4 Sectoral impact of operations 
After two years major changes in sectors of the European industry cannot be 
measured by instruments for short-term analysis. According to the audit 
such changes can be measured only after five to ten years. 
- Nevertheless, there have been developments in some areas that point to 
the potential impact of the programme. For example, in the film sector it 
can be seen that the incentives provided by Media enable it to influence 
a significant segment of European production. The same holds true for 
measures to promote television co-productions, development of animated 
films and exploitation of audiovisual works on the "second market". 
Training measures, especially in the economic and marketing areas, were 
rated very highly by the audit. 
By contrast, in many other areas, especially video, the resources available 
to the programme do not allow it to develop sufficiently to attain the 
critical mass needed to have an impact on the market. 
The worsening economic situation is hitting the audiovisual industry hard 
and the problems facing the programme are more difficult than initially 
anticipated. 
2.3 Effects of the economic context 
The trend in this context is all the more marked now that the audiovisual 
industry is confronted by more intense competition from outside the 
Community. 
Also affected by the crisis, the North American industry in particular is 
adopting a more aggressive approach to the European market where the profits 
are essential to its survival. The US industry already needs to make 30% of 
its film sales on the Community market, and up to 60% of its video sales. 
This growing aggressiveness is subjecting the European industry to pressure 
which the small businesses - one of Media's priority targets - are finding 
it increasingly difficult to resist. 
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In some sectors small businesses have little room for manoeuvre; for 
example, in Germany film distribution is 98% dominated by the US, and on the 
UK video market, the figure is nearly 99%. 
In television the outlook is equally worrying. Besides the numerous 
American programmes seen on European channels, whole channels of North 
American origin are becoming established in the European audiovisual area. 
New technologies - digital, interactive and multi-media - are being 
developed, ensuring continuous expansion of the industry, but they will not 
enable European small businesses to develop original programmes. If all 
software is taken together, the United States has increased its audiovisual 
exports by 50% in the last two years in readiness for future European 
markets. 
The fast expansion of the audiovisual sector could probably allow important 
industrial developments with positive effects on employment. Nevertheless, 
to preserve these potentialities, we have to encourage the professional 
cross-boarder cooperations and take advantage of the single european market. 
3. BUDGET IMPLEMENTATION 
The last recital of Council Decision 90/685/EEC puts the budget for the 
entire Media programme (1991-1995) at ECU 200 million and states that 
allocations will be determined on the basis of the financial perspective and 
within the limits of annual budget availabilities. Article 1 puts the funds 
for Community participation in 1991 and 1992 at ECU 84 million. 
Commitment appropriations of ECU 32.459 million and ECU 45.162 million were 
allocated to the programme in 1991 and 1992 respectively, making a total of 
ECU 77.621 million. For 1993 the figure is ECU 48.822 million. The 
appropriation in the preliminary draft budget for 1994 is ECU 49 million. 
From the conclusions in the audit, it emerges that once the programme 
becomes fully operational in 1993 its annual budget requirements (to 
implement the lines of action in the Decision) will be about ECU 50 million, 
taking account of the general economic background. 
At the end of 1994, the fourth year of implementation, Media will have used 
ECU 174.841 million of the estimated ECU 200 million in commitment 
appropriations required to implement the programme over five years. 
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There are several reasons why annual expenditure exceeded the average of 
ECU 40 million. 
Primarily, as mentioned earlier: 
- The difficult economic context affects the industry in general and in 
particular the fabric of small businesses which form the main component 
of the industry in Europe. The tougher competition from outside Europe 
increases the stresses, especially in the areas of exhibition and 
distribution. 
Returns on investment in projects did not match up to expectations. The 
audit points out that the development-production-marketing phase for 
audiovisual products must be assessed over five to ten years. This is 
why returns on investment, which vary from one project to another, cannot 
yet significantly refinance the project budgets. 
The massive response of industry to the Media projects, especially in the 
fields of training and development of production projects. 
This response is encouraging in that it favours long-term effects and 
makes it possible to act upstream of the industrial stage, the better to 
orient products towards the European market. 
But it means that the resources allocated to these projects were 
exhausted before the five years initially planned. 
In view of the above, the budgetary authority allocated annual amounts over 
and above the average ECU 40 million over five years provided for under 
Article 5 of the Decision. 
Since the audit estimates that the annual budget requirements of the 
programme stand at about ECU 50 million at the present stage of 
implementation, this level of financing should be maintained until 1995. 
Therefore a further ECU 30 million should be added to the initial estimate 
of ECU 200 million. 
(3> 
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4. COLLABORATION WITH NON-MEMBER COUNTRIES AND AUDIOVISUAL EUREKA 
4.1 General context 
Involvement in the MEDIA programme is becoming more and more important given 
the political impact of the audiovisual industry and the interest being 
shown by non-member countries. The council Decision makes provision for 
such involvement on three conditions (see Article 4 and Annex II): 
- the countries concerned must be members of Audiovisual Eureka; 
- they must have a formal cooperation agreement with the Community in the 
audiovisual sector; 
they must make a financial contribution in proportion to their 
involvement. 
A further point, in the Commission's view, is that the community's 
audiovisual policy is a coherent package of measures designed to strengthen 
Europe's audiovisual capacity, the MEDIA programme being one element. This 
being so, it believes that non-member countries wishing to participate in 
the MEDIA programme must endorse the overall objectives of the Community's 
audiovisual policy and be prepared to take the necessary steps to attain 
them. 
The situation differs for each of the three groups of countries: 
- countries belonging to the European Economic Area; 
countries that have a "Europe agreement" with the Community; 
- countries that have a bilateral cooperation agreement the community. 
4.1.1 EEA countries 
The EEA countries are Austria, Finland, Iceland, Norway and Sweden. Their 
participation is governed by the EEA Agreement both in the case of the Media 
programme (see Article 9 of Protocol 31) and the other aspects of 
audiovisual policy (see in particular Annex X on audiovisual services which 
relates to Council Directive 89/552/EEC - the "television without frontiers" 
directive). 
The contribution of EEA countries is covered by Article 82(1)(a) of the 
Agreement (calculations based on GDP) and (b) (cover for the effective costs 
of each party's participation). 
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Pending entry into force of the EEA Agreement, ad hoc participation was made 
possible from 1992 through Audiovisual EUREKA, without however prejudging 
the final arrangements to be decided when the time comes to implement the 
EEA Agreement in this sector. For the moment, the EEA countries' 
provisional contributions are paid direct to the projects via Audiovisual 
EUREKA. 
4.1.2 Europe agreements 
The multi-sectoral "Europe agreements" make express provision for 
collaboration in the audiovisual sector. The countries whuch have concluded 
"Europe agreements" are Hungary, Poland, Slovakia, the Czech Republic, 
Romania and Bulgaria. The provisions are similar in each case and cover the 
legislative framework (the "television without frontiers" directive), the 
Media programme and advanced technologies. There was no significant 
involvement of these countries during the reference period (1991 and 1992) 
pending entry into force of the framework agreements. Since January 1993 
Poland has been participating in one Media project, and from January 1994, 
Hungary will be fully involved. 
4.1.3 Bilateral agreements 
Exploratory talks are in progress with Switzerland and Cyprus. Applications 
have been received from Slovenia, Turkey and Israel. 
4.2 Consequences of the involvement of non-member countries for the 
future of the programme 
Media is not a cooperation programme according to the terms of Council 
Decision 90/6 85/EEC. The principle of proportional funding applied to 
non-member countries wishing to participate in the programme is consistent 
with this. The participation on an interim basis (total or partial) of 
non-member countries in the programme presents problems. 
The programme and its lines of action as approved in 1990 set out to 
establish a balance between the five Member States with a population of over 
30 million and the seven Member States with a population of less than 
20 million. The operation of projects attaching special importance to the 
second group of countries and the creation of a specific project (SCALE) for 
these countries reflect the concern for balance. 
-li­
lt now appears that the balance of the programme might be disrupted by 
admitting the countries referred to above, which are all in the second 
group. 
Opening up admission to the programme also presents considerable budgetary 
problems. 
In the case of the EEA countries experience has shown that the proportional 
contribution to the programme (calculated on the basis of Article 92(1) of 
the EEA Treaty) by these countries is well below the additional burden their 
participation places on it. The operating costs of projects and new 
requests for assistance entail an exponential increase in requirements. 
Before finalizing the agreements with the EEA countries it is essential to 
envisage a supplementary basis for contribution to the programme, namely 
Article 82(1)(b) and submit it for approval to the Joint EEA Committee. 
Participation by countries which have a Europe agreement with the Community 
will raise two types of problem likely to increase budgetary strain: the 
technical difficulty of objectively calculating their proportional 
contribution, and the financial difficulty they may encounter at the time of 
making the contribution. Although most countries expressed the wish to 
participate in the programme, their cooperation is bound to be very limited 
in practice. 
Accordingly, the Commission considers that alternative means of financing 
should be found to cover admission to the programme of the countries which 
have a Europe Agreement. 
Following recommendations of the Copenhagen Europeann Council in June 1993, 
the Commission is preparing a communication to the Council on the 
participation of non-member countries associated with Community programmes. 
Opening up admission to the Media programme will be discussed in this 
context. The Commission proposes to carry out an impact study of any 
enlargements of the Media programme. In the meantime existing agreements 
will continue to be provisional. 
With respect to any other bilateral agreements (for example, with 
Switzerland or Cyprus) the Commission will present to the Council 
negotiating briefs based on the twin conditions of acceptance of the overall 
objectives of Community audiovisual policy and full cover by each partner of 
the real costs of participation. 
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4 «3 Collaboration with Audiovisual EUREKA 
Collaboration with Audiovisual EUREKA continued throughout the reference 
period. It contributed to the establishment of a European Audiovisual 
Observatory in 1993, in cooperation with the council of Europe, and the 
opening-up to non-member countries for which EUREKA served as a stepping 
stone. 
The Commission also participated in the "labelling" of 15 EUREKA projects, 
four of them under the Media programme. This involvement entailed no 
additional financial contribution over and above the aid already granted to 
the Media projects. The appropriations available under the Media programme 
were allocated in accordance with the rules applicable to the programme. 
Generally speaking the commission considers that the labelling scheme is of 
limited value. 
The community's annual contribution to the budget of Audiovisual EUREKA 
(Secretariat and Observatory) under Article 4 of the Council Decision is 
ECU 450 000 at present. Once the Observatory becomes operational, the 
Community's contribution (under the annual budget for the Media programme) 
will have to increase. 
Certain amendments will therefore have to be made to Articles 4 and 7 of 
Annex I to the Decision. 
5. COMMISSION PROPOSALS FOR STRENGTHENING THE PROGRAMME 
5.1 Guidelines 
The Commission presented the conclusions of the audit to the Advisory 
Committee, the representatives of the professional organizations and those 
in charge of Media projects. 
The following options emerged from their discussions: 
- ensure the continuation of the Media programme generally appreciated by 
industry by maintaining the present level of financing at least until 
1995. The results of this assessment should be taken into account in 
1995; 
- promote closer coordination, or even alignment of certain activities, the 
better to concentrate available resources on priority objectives; 
- reinforce project management by more systematic monitoring of their 
operation; 
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study closely the impact of opening up admission to the programme to 
non-member countries before enlargement is finally established; 
in a second stage, envisage extension of the programme beyond 1995 after 
consultations with those concerned while adapting priorities and 
procedures to changes in the audiovisual industry. 
5.2 Proposals 
5.2.1 Proposals involving amendment of Council Decision 90/685/EEC 
The Commission considers that, given the positive results of the progamme in 
a number of areas, and to enable it to continue to develop within the 
timeframe set by the Council (1995), annual expenditure should be maintained 
at the present level. 
Accordingly, the Commission takes the view that the amount considered 
necessary for the programme should be raised by ECU 30 million. 
The evaluation has clearly shown that failure to maintain the annual level 
of expenditure would result in: 
sub-critical funding of all projects, leading to a fall in the 
programme's overall effectiveness; or 
- the interruption of certain projects; this would mean that investment 
already approved would be wasted and would leave gaps in the coverage of 
the audiovisual industry. 
To take account of the consequences of the participation of certain 
non-member countries described under 4.2, it is proposed that Article 4 of 
the Decision be amended. The Commission believes that it is advisable not 
to finalize the agreements before carrying out a study on the impact of 
enlargement on the programme. 
Certain amendments to Articles 4 and 7 and Annex I of the Decision are 
necessary in the light of comments on Audiovisual Eureka (see 4.3). They 
relate in particular to the "projects" concept, for which the mechanisms 
have proved inoperable. In addition, provision must be made for a Community 
contribution to the European Audiovisual Observatory of the European 
audiovisual industry. 
These amendments render Annex II of the Decision obsolete. 
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To give effect to the measures described at 5.2.2 it is proposed that 
Annex I be amended and a new Annex II be added to the Decision, containing 
the operating procedures of the associations responsible for the management 
of the Media projects. 
5.2.2- Adjustments to the programme falling within the Commission's 
executive powers 
The consolidation of Media's resources proposed by the Commission will be 
accompanied by reinforced strategic priorities and improved project 
management. 
5.2.2.1 Structural operations 
According to the conclusions of the evaluation (see pp. 2-3), three 
priorities for industry stand out and should be developed through the 
projects: 
stepping up the economic promotion of the industry•s initiatives 
throughout the audiovisual chain; 
- reinforcing and encouraging cross-frontier groupings, particularly in the 
areas of production, distribution and exhibition; 
- increasing the "mobilization effect" of the programme by diversifying 
incentives. 
5.2.2.2 Recentering sectoral activities 
To step up their impact available resources should be concentrated on 
certain priority objectives (see p. 5), including training, preproduction, 
distribution and marketing. 
Therefore, a two-tier coordination procedure should be established: 
strategic coordination in the framework of the standing control exercised 
by the Commission over its projects. The aim will be to strictly 
delineate project activities and the areas of cooperation between them; 
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structural coordination between projects operating in the same sector. In 
some cases it could lead to the integration of various structures in a 
common framework; in others, it would involve a transfer of activities 
between projects. 
5.2.2.3 Control of project management 
The Commission will ensure transparency of the projects' management 
structures. 
It will set up a computerized central control system to monitor the 
operation, activities and market impact of projects more closely. 
6. GENERAL CONCLUSIONS 
The Council is invited to approve the Commission's proposals requiring 
amendment of its Decision of 21 December 1990 (90/685/EEC) creating the 
Media programme, by adopting the attached proposal for a Decision following 
consultation of Parliament and the Economic and Social Committee. 
Since promotion of the European audiovisual industry is necessary for the 
operation of the single market, and since the EEC Treaty does not provide 
the necessary powers, the amendments must be based on Article 235 of the 
Treaty, as was Decision 90/695/EEC. The proposed amendments are as 
follows : 
- an ECU 30 million increase in the budget (last recital); 
- changes to certain provisions on Audiovisual EUREKA projects (Articles 4 
and 7 and Annex I); 
- changes to certain provisions on the participation of non-Community 
countries (Article 4); 
amendment of lines of action (Annex I); 
inclusion of details regarding operating rules for associations 
responsible for the management of projects (new Annex II). 
AG 
PROPOSAL FOR 
COUNCIL DECISION 
of 
amending Council Decision 90/685/EEC 
concerning the implementation of an action programme to promote 
the development of the European audiovisual industry (MEDIA) 
(1991-1995) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and in particular Article 235 thereof, 
Having regard to the proposal from the Commission,1 
Having regard to the opinion of the European Parliament,2 
Having regard to the opinion of the Economic and Social Committee,3 
Whereas the Commission has presented the evaluation report^ on the first 
two years of operation of Council Decision 90/685/EEC,5 as required by 
Article 8 of that decision; 
Whereas the findings of this evaluation and the results of subsequent 
consultations with the industry have highlighted the need for a number of 
amendments to Decision 90/685/EEC; 
Whereas changes on the audiovisual market also call for amendments to 
Decision 90/685/EEC; 
Whereas it appears necessary, notably in the light of the findings of the 
evaluation, to step up the programme by improving management; 
Whereas, if the objectives of the Community as set out in Article 2 of the 
Treaty are to be achieved, promotion of the European audiovisual programme 
industry is necessary for the operation of the single market; whereas, 
since the Treaty has not provided the necessary powers, recourse must be had 
to Article 235; 
1 OJ 
2 OJ 
3 OJ 
4 COM(93) 364 final. 
5 OJ No L 380, 31.12.1990, p. 37 
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HAS DECIDED AS FOLLOWS: 
Article 1 
Decision 9 0/6 85/EEC is amended as follows: 
1. Article 4 is replaced by the following: 
"In implementing the programme, the Community may also contribute to 
promoting cooperation with professionals in the audiovisual industry in 
member countries of the Council of Europe. To this end, these 
professionals may be invited to participate in initiatives under the 
action programme within the framework of agreements on cooperation in 
the audiovisual media signed by the Community with the non-member 
countries concerned. Participation in projects shall be formalized by 
agreements with those responsible for the project concerned; new 
members shall contribute to the project in proportion to their 
participation. 
The Community shall also contribute to the operating costs of the 
Audiovisual Eureka Secretariat and to the operation of a European 
Audiovisual observatory." 
2. The words "participation in Audiovisual Eureka projects", the "second 
paragraph of" and "and agreements provided for in Annex II" are deleted 
from Article 7(3)(c). 
Article 2 
Annex I to Decision 90/685/EEC is replaced by Annex I to this Decision. 
Annex II to Decision 90/685/EEC is deleted. 
A new Annex II is attached to this Decision. 
Done at Brussels, 
For the Council 
The President 
^ 
ANNEX 1 
^5> 
ANNEX 1 
MEASURES TO BE PUT INTO EFFECT 
1. Distribution, exhibition and promotion infrastructures 
1.1. Distribution and cinema exhibition of films 
Increased support for the cross-frontier 
distribution of European films to cinemas. 
Measures to promote European films outside 
the Community (group presence at festivals 
and fairs). 
- Reinforcement of measures to promote the 
cinema exhibition sector. 
1.2. Distribution on video cassette 
Stronger measures to promote the production 
and cross-frontier distribution of European 
films and programmes on video cassette. 
1.3. Support for multilingualism in television 
programmes 
- Stronger measures to promote the circulation 
of programmes by providing support for dubbing 
and subtitling, by providing research into ways of 
perfecting these techniques and by 
organizing training for audiovisual 
professionals working in a multilingual 
environment. 
- Support for the development of multilingual 
television programmes and broadcasts. 
1.4. Development of markets and support for the 
distribution of independent productions 
Intensifies promotion of independent European 
producers : 
. promoting the presence of producers 
at major international fairs, 
. organizing special fairs for producers, 
distributors and investors, 
. computerizing the compilation and 
dissemination of data on independent 
European productions, 
Stronger measures to encourage the transmission 
by television stations of independent European 
productions. 
Stronger measures to promote the European film 
in general. 
Improvement of production conditions 
2.1 Development and preproduction 
- support for the development of screenplays 
and the preproduction of works of fiction. 
- Strengthening the capacity to develop 
screenplays and the preproduction of 
creative documentaries. 
- Development of the professional skills of 
European screenwriters. 
2.2 Restructuring of the animated film industry 
- Stronger measures to promote the animated 
film industry by: 
encouraging the networking of studios and the 
industrialization of production 
methods ; 
supporting the production of series "pilots" 
and animated films; 
promoting contacts between producers and 
distributors ; 
computerizing the compilation and 
dissemination of data relating to the 
animated film industry. 
2.3. Use of new technologies in programme production 
- Developing the use of new technologies in 
programme production by: 
issuing invitations to tender to encourage 
innovative projects related to high-definition, 
digital and interactive television; 
promoting schemes to initiate professionals 
in the use of these techniques. 
2.4 Contribution to the establishment of "a second market" 
using archive material by: 
- providing support for the development of archive-based 
television programmes and the compilation of 
archive inventories. 
-2 1 
- developing initiatives to catalogue, 
conserve, restore and rescue films. 
3. Stimulation of investment 
- Stronger measures to encourage the development 
of structures to mobilize and stimulate 
investment in the audiovisual industry. 
4. Training in business and marketing for professionals 
- Intensification of measures to provide training for 
young producers. 
- Further development of activities related to 
training in business and marketing in different 
areas of the audiovisual industry. 
Development of potential in countries with smaller 
audiovisual production capacities and/or with a limited 
geographical and linguistic area 
- Promoting development of the audiovisual 
industry in the countries concerned, beginning 
with independent production, by measures designed 
to improve the management and the structure of 
firms. 
2Z 
ANNEX 2 
23 
ANNEX II 
Operating rules of Associations 
responsible for the management of Media programme projects 
1. The Associations shall be legally constituted, under the national law of 
the country in which they are established, as non-profit-making Associations 
(except for projects under the heading "Stimulation of financial 
mechanisms"). Their articles of association shall appear in an official 
publication. 
In the event of the dissolution of an Association, its assets shall be 
placed at the disposal of another Association active within the framework of 
the Media programme. Provision for such an eventuality shall be included in 
the articles of association of each Association. 
2. The Associations shall be composed of nationals of the Member States. If 
the programme is extended to non-member countries, professionals from those 
countries may also be represented in these Associations. 
3. As far as possible, a balance of nationalities shall be maintained on the 
governing bodies of the Associations, in particular on the Board of 
Directors. 
4. The members of the managing bodies of the Associations shall rotate on a 
routine basis. 
5. Permanent staff members and consultants employed by the Associations 
shall be recruited after the post has been advertised. The Commission 
shall be associated with the selection procedure. 
6. The Associations' activities shall be open to European firms and 
professionals in the Member States and non-member countries which may 
subsequently be admitted to the programme. 
7. An annual agreement shall be concluded between the Commission and each of 
the Associations in the context of implementing the Media programme. The 
agreement shall include the programme of the Association's activities for 
the year in question and a budget estimate. 
8. The persons in charge in each Association shall be required to give 
notice in good time and obtain the prior agreement of Commission 
representatives with respect to all matters affecting the implementation of 
the programme, and in particular: 
(a) the establishment of, and amendments to, the articles of association 
and rules of procedure of the Association; 
2-H 
(b) new initiatives or changes in the programme of activities; 
(c) publications and advertising, and their content; 
(d) public events; 
(e) approaches to international, national or regional political 
authorities; 
(f) negotiations or agreements concerning the participation of 
professionals of non-Community countries in the activities carried 
out; 
(g) in general, any negotiations likely to have repercussions on 
relations between the Commission and the political authorities 
and/or professional organizations. 
9. Commission representatives shall be invited to attend all meetings of the 
authorities of the Association (Annual General Meeting, Board of Directors, 
Steering Committee and Experts' Committee). These authorities shall take 
the fullest account of observations by Commission representatives. 
10. The Associations shall undertake to participate in or arrange to be 
represented at meetings and general events where their presence is required 
by the Commission (in particular information days and seminars). 
11. The Associations shall provide the Commission with any document 
requested by the Community institutions, especially in the context of 
central management control by the Commission, community financial 
allocations may be made only if recipients declare in writing that they will 
allow the Court of Auditors to verify the use made of the sum allotted to 
them. 
12. Every event or publication of the Associations shall state that it is 
"an initiative of the Media programme of the European Communities". 
13. The Associations shall undertake to require recipients of financial 
allocations to include on the products of their activities the words: "made 
with the assistance of the European Communities' Media programme". 
14. The Assciations shall regularly make available to the Commission the 
information required for central management control, particularly with 
respect to: 
-operations in the following areas: 
-requests for assistance from firms; 
-expertise and project selection; 
-amount of allocations decided on; 
25" 
-monitoring procedure and if applicable, recovery of investment; 
-evaluation of projects supported; 
-impact of these operations on the market: 
-effects of financial mobilization; 
-dissemination and distribution of programmes; 
-results in terms of audience; 
-visibility of Community intervention; 
-internal management of the Association: 
-composition and activities of management bodies; 
-implementation of the annual agreements with the Commission; 
-observance of management rules laid down by the Commission. 
z.6 
FINANCIAL STATEMENT 
I. Title of operation 
Proposal for amendment and extension of the action programme to promote the 
development of the European audiovisual industry (MEDIA) (1991-1995) 
II. Budget heading involved 
Item B3-2010 (part of former Item B3-3000) 
III. Legal basis 
- Article 235 of the EEC Treaty 
- Council Decision 90/685/EEC of 21 December 1990 concerning the 
implementation of an action programme to promote the development of the 
European audiovisual industry (MEDIA) (1991 - 1995) 
- Council Decision... of ... amending the MEDIA programme (1991 - 1995) 
IV. Description of operation 
4.1. Specific objectives of operation 
The purpose of the MEDIA programme (1991 - 1995), an integral part of the 
Community's audiovisual policy, is to support the economic development of 
the audiovisual industry by providing funding upstream and downstream of 
production. It contributes to the creation of a European audiovisual area, 
balance between market forces and stimulation of investment. It covers all 
industrial functions of the sector with five lines of action and 19 projects 
run by decentralized associations of professionals in the Member States, 
involving almost 20 000 companies and institutions. 
The Commission provides coordination in four main sectors: distribution, 
exhibition and promotion; improvement of production conditions; financing; 
and training. 
A recital to Council Decision 90/685/EEC put the Community's contribution to 
the programme at ECU 200 million for the period 1991 to 1995. The amount 
actually made available, in commitment appropriations, for 1991, 1992 and 
1993 was ECU 125.912 million. 
Z3 
In the preliminary draft budget for 1994, the commission has entered 
ECU 49 million in commitment appropriations. Allowing for the progress of 
certain projects towards full operational status and the decline in the 
value of money, forecasts for 1995 point to a requirement of the order of 
ECU 54.450 million. 
4.2. Duration 
4.2.1 Evaluation of the programme 
The MEDIA programme covers the period 1991 - 1995. 
Article 8 of the Council Decision requires the commission to present a 
report on the programme to the Council, Parliament and the Economic and 
Social Committee at the end of the first two years. 
To comply with this requirement the Commission conducted an evaluation based 
on: 
- the results of an independent audit carried out by Roland Berger 
& Partner, consultants selected following an invitation to tender; 
- observations by members of the MEDIA Advisory committee; 
comments by representatives of the main associations of professionals; 
remarks by project coordinators. 
In the light of these elements, the Commission decided to make a number of 
adjustments affecting the management and structure of the programme and 
associated projects. 
4.2.2 Justification for additional resources 
It also decided to propose a partial revision of the programme, involving an 
increase in resources (an additional ECU 30 million in 1995) deemed 
necessary for implementation of the programme. 
The increased funding is necessary to take account of four factors: 
1. The harsh economic climate affecting the audiovisual sector in general 
and the fabric of small businesses which are the main component of the 
European audiovisual sector. 
2. The massive response of industry to the programme, especially in the 
areas of training and development of production projects. 
3. The decision to invest in restructuring operations of the industry given 
its increasingly precarious situation. 
28 
4. Inadequate returns on projects based on advances granted on the basis of 
receipts. The audit points out that the development-production-marketing 
phase for audiovisual products should be assessed over five to ten years. 
This is why in the first two years of the programme returns on investment 
are still marginal. 
These proposed changes require amendment of Council Decision 90/685/EEC. 
For details of the nature and financial impact of these amendments, see 7.2. 
V. Classification of expenditure 
5.1 Non-compulsory 
5.2 Differentiated 
VI. Type of expenditure 
In most instances, the exception being training activities which are 
subsidized directly, the Commission makes a financial contribution to the 
associations that manage the 19 projects. These then make refundable 
advances to the various companies eligible under the criteria laid down by 
the commission. 
Expenditure will be identical under the extended programme and the 
additional resources. 
VTI. Financial impact 
7.1 Method of calculating total cost of operation 
The total cost of the operation during the initial period (1991 - 1995), was 
calculated by multiplying the average Community contribution by the average 
number of beneficiaries and then aggregating average costs for the 
19 projects (details of these cost elements are given in the audit report 
annexed to the Commission Communication on the evaluation of the Media 
programme (COM(93)364)). 
To this were added the running costs of project structures and miscellaneous 
expenditure (promotional costs, participation in Audiovisual EUREKA) which 
cannot be charged to specific projects. 
The method of calculating costs is identical for the additional resources 
requested. 
7.2 Breakdown of costs 
See Annex. 
^3 
7.3 Indicative schedule of appropriations 
See Annex. 
VTII. Anti-fraud measures 
Financial contributions are subject to the production of detailed supporting 
documents prior to disbursement. 
Furthermore, the various authorities responsible for control (Court of 
Auditors, Financial Control, authorizing department) conduct regular checks 
on beneficiaries and the associations managing the projects. 
Regular audits are provided for under the programme. The first, covering 
1991 and 1992, has just been completed. A second is planned for the end of 
1994. 
IX. Elements of cost-effectiveness analysis 
9.1 The programme sets out to stimulate and reinforce the capacity of the 
audiovisual industry to offer European products by contributing to the 
creation of a European audiovisual area. 
Five main lines of action have been developed under the programme since 1991 
and will be developed further between now and the end of 1995. 
1. Development of European distribution, exhibition and promotion 
infrastructures. 
2. Improvement of production conditions upstream and downstream of 
production proper. 
3. stimulation of investment. 
4. Business and marketing training for professionals. 
5. Development of audiovisual potential in countries that are "small" in 
terms of production capacity, geography and language. 
The beneficiaries of these lines of action are to be found at various points 
in the audiovisual chain: directors, producers, financiers, distributors, 
exhibitors. Priority is given to independent producers and small 
businesses. 
9.2 The MEDIA programme is an integral part of the Community's audiovisual 
policy, intervening to assist the programme industry. 
3o 
As required by the subsidiarity principle, the programme complements 
national support measures. 
It operates through ad hoc associations of professionals that ensure that 
Community support is adapted to the real, changing needs of the media 
industry. The associations managing projects, under permanent Commission 
surveillance, usually provide refundable advances. 
The multiplier effect is in excess of four: Community support for the MEDIA 
programme represents no more than 24% of the investment generated for 
projects. 
9.3 The external audit carried out after the first two years' of operation 
came to the following operational conclusions and made the following 
suggestions (a summary of the audit is attached to the Commission's 
Communication): 
The MEDIA programme has a high profile and is well-accepted in the Member 
States. 
The overall objectives of the Council Decision - industry potential and 
balanced variety - have been respected. 
Industry potential 
It is too early to expect the programme to have produced significant results 
in terms of quantity but the qualitative approach is judged to be excellent. 
Balanced variety 
The impact on small businesses and the media industry, notably in the 
"small" countries, is considerable and balanced between the different media 
(television, cinema, video). 
Concentration on efforts to improve competitiveness is regarded as 
justified. 
Main suggestions for changes and improvements 
Budget and timeframe of programme: 
MEDIA'S budget is small compared with total support for the audiovisual 
industry. 
30 
The programme should be seen as an additional measure for promoting and 
integrating the European audiovisual industry. 
1993 is the first year that projects are operating with fully-fledged 
structures and proper planning of activities. 
It is therefore vital that the resources available for projects in 1994 and 
1995 should be of the same order as in 1993. 
Of those projects in hand that are subject to audit, nine need additional 
resources if they are to continue (two subject to modification). Seven 
could continue as at present, while two would have to be scaled down. 
Budget allocations must be evaluated in the light of three main criteria 
(critical mass of intervention, definition of target groups, and 
verification of the value of all activities, present or planned). 
In the interests of sound management, an early decision on MEDIA'S future 
budget must be taken. 
Main proposals for organizational and structural changes 
The commission will establish a computerized central monitoring system so 
that the functioning, activity and market impact of projects can be checked 
more closely. 
Project coordinators should be in charge of all the tools used by the 
different projects and a management-by-objective system should be 
introduced. 
X. Administrative expenditure 
Not applicable. 
ALL AMOUNTS ARE EXPRESSED IN CURRENT ECU (million) - fl/s>A/£X 
BREAKDOWN BY 
LINE OF ACTION 
1, Distribution, exhibition 
and promotion 
infrastructures 
2. Improvement of production 
conditions 
3. Stimulation of investment 
4. Training of professionals 
5. Development of potential 
in ^small'1 countries 
GRAND TOTAL PROGRAMME 1991-1995 
91 
13,813 
12,188 
1,623 92 
19,465 
17,175 
2,000 
2,438 3,320 
2,438 3,200 93 
20,506 
18,064 
2,413 
3,619 
3,618 
32,500 45,160 48,220 94 
20,825 
18,375 
2,450 
3,675 
3,675 95 
23,670 
20,500 
2,450 
4,500 
4,000 
49,000 55,120 TOTAL 
98,279 
86,302 
10,936 
17,552 
16,931 
230,000 (1) 
(l) Including the ECU 30 million requested for 1995. 
3 3 ISSN 0254-1475 
COM(93) 462 final 
DOCUMENTS 
EN 15 
Catalogue number : CB-CO-93-507-EN-C 
ISBN 92-77-59607-4 
Office for Official Publications of the European Communities 
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