EN    EN  EN 
 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 9.1.2009 
SEC(2008) 3098 final 
  
COMMISSION STAFF WORKING DOCUMENT 
 
Accompanying document to the  
Proposal for a 
 
DECISION OF THE EUROPEAN P ARLIAMENT AND OF THE COUNCIL 
  
establishing an audiovisual cooperation  programme with third countries MEDIA 
Mundus 
    
IMPACT ASSESSMENT REPORT  
{COM(2008) 892} 
{SEC(2008) 3097} {SEC(2008) 3102}  
 
EN iii   EN COMMISSION STAFF WORKING DOCUMENT 
 
Accompanying document to the  
Proposal for a 
 
DECISION OF THE EUROPEAN P ARLIAMENT AND OF THE COUNCIL 
  
establishing an audiovisual cooperation  programme with third countries MEDIA 
Mundus 
    
IMPACT ASSESSMENT REPORT  
Integrating ex ante evaluation requirements 
This Impact Assessment Report is prepared as a basis for comments. It only commits the 
Commission’s services involved in its preparation and does not prejudge the final form of any decision 
to be taken by the Commission. 
The draft of this Impact Assessment Report was discussed in oral procedure with the Impact 
Assessment Board on 27 August 2008; on 01 Sept ember 2008 and on 13 October 2009 the Impact 
Assessment Board issued its opinion / recommendati ons, which are all integrated into this Report. 
 
EN iv   EN  
 
TABLE OF CONTENTS 
Introduction ................................................................................................................... ......................- 9 - 
1. Section 1: Procedural issues and cons ultation of interested parties...................................- 10 - 
1.1. Organisation and timing................................................................................................... ..- 10 - 
1.2. Consultation and expertise................................................................................................ .- 10 - 
1.3. Main results and follow-up  to the consultations ................................................................- 12 - 
1.4. The opinion of the Impact Assessment Board ...................................................................- 12 - 
2. Section 2: Problem definition and rationale for intervention.............................................- 13 - 
2.1. Context: Introduction - value chain of the audiovisual industry........................................- 13 - 2.2. What are the nature and the scope of the problem? ...........................................................- 14 - 2.3. What are the underlying causes behind these problems?...................................................- 16 - 
2.4. Who is affected, in what ways and to what extent? ...........................................................- 18 - 
2.5. How would the problem evolve, all things being equal? ...................................................- 18 - 
2.5.1. Missed potential for opportunities on third country markets .............................................- 19 - 2.5.2. Insufficiency of existing internationalisation efforts .........................................................- 19 - 2.6. Events triggering the initiative - the Preparatory Action MEDIA International ................- 21 - 
2.7. Does the EU have the right to act?.....................................................................................- 2 2 - 
2.8. Summary of problems....................................................................................................... .- 23 - 
3. Section 3: Objectives ....................................................................................................... ..- 24 - 
3.1. General policy objectives (global obj ectives) and specific objectives...............................- 24 - 
3.2. Consistency with other European Union policies and other objectives.............................- 25 - 
4. Section 4: Policy options and Impacts ...............................................................................- 25 - 4.1. Option 1: Business as usual ............................................................................................... - 25 - 
4.2. Impact of option 1 – "Business as usual"...........................................................................- 25 - 
4.3. Option 2: Extension of existing instruments......................................................................- 26 - 4.3.1. Extension of Euromed Audiovisual II a nd the EU – ACP Support Programme for Cinema 
and the Audiovisual Industry .............................................................................................- 26 -  
4.3.2. Amendment of the MEDIA 2007 programme ...................................................................- 26 - 
4.4. Impact of option 2 - Extension of existing instruments .....................................................- 26 - 
4.4.1. Impact of amending Euromed Audiovisu al II and the EU – ACP support programme for 
Cinema and the Audiovisual Industry................................................................................- 26 - 
 
EN v   EN 4.4.2. Impact of amending the MEDIA 2007 Programme...........................................................- 27 - 
4.4.3. Conclusion .............................................................................................................. ...........- 28 - 
4.5. Option 3: Creation of a new instrument.............................................................................- 29 - 
4.5.1. Specific Objective 1 – information exchange and market intelligence..............................- 30 - 
4.5.2. Specific Objective 2 - Facilitati on of international co-productions ........................................33 
4.5.3. Specific Objective 3 - Distribution and circulation of audiovisual works ..............................37 4.5.4. Specific Objective 4 - Reach ne w audiences and promote film literacy.................................40 
5. Section 5: Comparison of Operational objectives / action lines/ options ...............................41 5.1. Cost implications of the programme over 3 years ..................................................................41 
5.1.1. Scenario 1.............................................................................................................. ..................41 
5.1.2. Scenario 2.............................................................................................................. ..................42 
5.1.3. Scenario 3.............................................................................................................. ..................42 
5.2. Assumptions on the cost effectiveness and th e European added value regarding the different 
operational objectives; Scenarios 1 and 2 ...............................................................................44 
5.2.1. Specific objective 1: Information exchange  and market intelligence – Scenarios 1 and 2.....44 
5.2.2. Specific objective 2: Facilitate international co-production activities - Scenario 1................46 5.2.3. Specific Objective 2: Facilitate intern ational co-production activities - Scenario 2...............47 
5.2.4. Specific objective 3: Distribution and circulation support - Scenario 1 .................................49 
5.2.5. Specific objective 3: Distribution and circulation support - Scenario 2 .................................51 
5.2.6. Specific objective 4: Reach new audiences and promote film literacy...................................52 
5.3. Assumptions on the cost effectiveness and th e European added value regarding the different 
operational objectives; Scenario 3 ..........................................................................................54 
5.3.1. Specific objective 1: Information excha nge and market intelligence – Scenario 3 ................54 
5.3.2. Specific objective 2: Competitiveness and distribution - Scenario 3......................................54 
5.3.3. Specific objective 3: Circulation - Scenario 3.........................................................................5 5 
5.4. Comparison of alternative specific objectives / action lines...................................................56 5.5. Conclusion regarding the pr eferred operational objectives ....................................................58 
5.5.1. Scenarios 1 and 2 ....................................................................................................... .............58 
5.5.2. Scenario 3.............................................................................................................. ..................59 
5.6. Extension of MEDIA 2007 versus creat ion of a new programme MEDIA Mundus..............60 
5.7. Risks and counter measures ................................................................................................ ....61 
5.8. Lessons from the past..................................................................................................... .........63 
5.9. Comparison of policy options.............................................................................................. ...64 
 
EN vi   EN 6. Section 6: Monitoring and evaluation.....................................................................................64 
6.1. Nature and frequency of  the evaluation process .....................................................................64 
6.2. Monitoring - Choice of indicators......................................................................................... ..65 
 
EN vii   EN EXHIBITS 
Exhibit 1 Chronology of Impact Assessment Exhibit 2 Distribution of interviews accord ing to region and actors in value chain 
Exhibit 3  Life cycle of a film - Value chain 
Exhibit 4  European film market, 2004 to 2006 Exhibit 5  Market share of European and US films in third countries – 2006 Exhibit 6 Breakdown of admissions in the European Union - Admissions by origin of films  Exhibit 7  Top 10 third country films (excluding the US) in the EU- 2002 to 2006 
Exhibit 8  Comparison of TV advertising spend in the EU versus USA in 2006  
Exhibit 9 MEDIA International Preparatory Action 2008: Proposals Exhibit 10 Problem tree Exhibit 11 Potential impact of Operational Objective/Action Line 1 Exhibit 12 Alternative instruments for delivering operational objective 2 Exhibit 13 Potential impact of Operational Objective/Action Line 2.1 
Exhibit 14 Potential impact of Operational Objective/Action Line 2.2  
Exhibit 15 Alternative instruments for delivering operational objective 3 Exhibit 16 Potential impact of Operational Objective/Action Line 3  Exhibit 17  Potential impact of Operational Objective/Action Line 4 Exhibit 18 Cost implications of a new programme - 2011 to 2013 for scenario 1 
Exhibit 19 Cost implications of a new programme - 2011 to 2013 for scenario 2 
Exhibit 20 Cost implications of a new programme - 2011 to 2013 for scenario 3 Exhibit 21 Output and unit costs per proposed act ion line for specific objective 1, Scenarios 1 
and 2 
Exhibit 22 Output and unit costs per proposed action line for specific objective 2, Scenario 1 
Exhibit 23 Output and unit costs per proposed action line for specific objective 2, Scenario 2 
Exhibit 24 Output and unit costs per proposed action line for specific objective 3, Scenario 1 Exhibit 25 Output and unit costs per proposed action line for specific objective 3, Scenario 2 Exhibit 26 Output and unit costs per proposed act ion line for specific objective 4, Scenarios 1 
and 2 
Exhibit 27 Output and unit costs per proposed action line for specific objective 1, Scenario 3 
Exhibit 28 Output and unit costs per proposed action line for specific objective 2, Scenario 3 
Exhibit 29 Output and unit costs per proposed action line for specific objective 3, Scenario 3 Exhibit 30 Likely effectiveness of the different objectives, Scenarios 1 and 2 Exhibit 31 Likely effectiveness of the different objectives, Scenario 3 Exhibit 32 Table of preferred operational objec tives between the scenario 1 and the scenario 
2 
Exhibit 33 Table of preferred operational objectives, Scenario 3   Exhibit 34 Comparison of policy option 2 (extension of MEDIA 2007) and policy option 3 
(creation of a new instrument) 
Exhibit 35 Comparison of policy options 
 
EN viii   EN ANNEXES 
Annex 1 Assessment of the impacts by T echnopolis / Media Consulting Group; Final 
Report  
Annex 2 Summary of public online consultation  
Annex 3 The film industry value chain Annex 4 Structure of audiovisual markets Annex 5 Market share (EU) according to origin of feature films - 2006  Annex 6 Market size – the effect on exports 
Annex 7 Missed potential for opportunities on third countries markets 
Annex 8 Comparison of International Film Funds Annex 9 Preparatory Action MEDIA International selected projects Annex 10 A Financial Annex Scenario 2 Annex 10 B Financial Annex Scenario 1 Annex 11 Actions to be implemented 
Annex 12 Implementation and programme delivery 
Annex 13 Intervention Tree for Policy Options 1,2 & 3 Annex 14 Intervention Tree for Policy Option 3 Annex 15 Specific objectives and indicators  Annex 16 Operational objectives and indicators  
 
EN - 9 -   EN  
INTRODUCTION  
The audiovisual sector is an essential vector for cr eating highly skilled future -oriented jobs and for 
conveying and developing cultural values. It plays a ma jor role in the context of the i2010 initiative –
the policy umbrella for the European information so ciety and media policies – in the context of the 
Lisbon agenda.  
Since 1991, Community support in the context of consecutive MEDIA programmes1 is intended to 
enhance competitiveness and, in particular, to in crease the circulation in Europe of non-national 
European audiovisual works2.  
MEDIA 2007 is designed to enable the European audi ovisual sector to develop its cultural, social and 
economic potential on the internal market . It does not include support for the production phase of 
audiovisual works for which a variety of na tional support schemes exist. Instead, the MEDIA 
programmes have focused on support upstream and downstream of production support where 
European added value and cost eff ectiveness are much more pronounced.  
- The external dimension of audiovisual policy is taking on increasing importance:  in 2006 the 
European Community ratified togeth er with 12 Member States the UNESCO Convention on the 
protection and promotion of the diversity of cultural expressions3. 
It is in this context that on 13 December 2007, th e European Parliament adopted, in the 2008 budget, a 
Preparatory Action focusing on developing European Union relations with third-country audiovisual 
markets. This Preparatory Action MEDIA Internati onal provides the opportunity for structuring and 
strengthening relations and networks between Eur opean Union and third-country professionals in the 
audiovisual sector, for the mutual benefit of the European industry and that of the third countries involved. Intensified exchange a nd cooperation with non-European Union professionals strengthen the 
competitiveness of the European audiovisual industry.  At the joint invitation of Viviane Reding and 
Gilles Jacob, President of the Cannes Film Festival, and in the presence of José Manuel Barroso, 
ministers in charge of audiovisual matters in  the European Union and the EFTA countries, met 
informally in Cannes on 19 May 2008, and adopted a declaration welcoming the European Parliament's initiative on the MEDIA International Preparatory Action and encouraging the 
Commission " to pursue the development of this initia tive and to examine the desirability and the 
possibility of presenting, before the end of the yea r, a proposal for a suppor t programme to promote 
cooperation between European audi ovisual industry professionals and industry professionals in third 
countries for the mutual benefit of all participants" . 
With a view to proposing a legal basis following the Preparatory Action, DG INFSO has prepared this 
Impact Assessment on a possible future MEDIA Mundus programme.  
                                                 
1  MEDIA I 1991-1995, MEDIA II 1996-2000, ME DIA Plus and MEDIA Training 2001-2006. 
2  Audiovisual work for the purpose of this Impact A ssessment Report and the proposed new programme MEDIA 
Mundus  means a set of moving images with or without sound, as defined in Ar ticle 1 of the Audiovisual Media 
Services Directive (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 provision of audiovisual media services, 
(OJ L 298, 17.10.1989, p. 23), last amended by the ne w Audiovisual Media Services Directive 2007/65/EC.) 
Examples of audiovisual works include feature films, documentaries, animation films and to a certain extent video 
games. In principle the scope of the initiative would embr ace all audiovisual works inde pendent from their cultural 
value and therefore no criteria relating to cultural divers ity would need to be introdu ced. Exceptions might apply 
for video games and other moving content.  Here criteria would relate to the “contribution to the cultural heritage” 
and the “artistic value of the project”. 
3 UNESCO Convention on the protection and promo tion of the diversity of cultural expressions. 
http://ec.europa.eu/culture/porta l/action/diversity/unesco_en.htm   
 
EN - 10 -   EN A future MEDIA Mundus programme would not ov erlap in any way with the existing MEDIA 2007 
Programme, but would be a complementary instrument to MEDIA 2007. Whereas the objectives of MEDIA 2007 are focused on the internal market, t hose of a MEDIA Mundus programme would focus 
on the external dimension of the audiovisual i ndustry. A point of convergence for both Programmes 
would be their aim to strengthen the competitiven ess of the European audiovisual industry.  
1. S
ECTION 1: PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
• Lead Directorate-General : Directorate-General for Information Society and Media. 
• Other involved services: DGs AIDCO, BUDG, DEV, EAC, ENTR, LS, RELEX, SG, TRADE, 
EACEA 
• Agenda planning / INFSO Work Programme : Reference number 2008/INFSO/046 
1.1. Organisation and timing 
Exhibit 1: Chronology of Impact Assessment 
February to July 2008 Consultation of stak eholders on the possibility of a future new 
programme at various events, meetings and conferences (see chapter 1.2.) 
March 2008 1st Inter- Service Steering Group accomp anying the Impact Assessment4. 
DGs AIDCO, BEPA, COMM, DEV, EAC, EACEA, ENTR, EUROSTAT, LS, RELEX, SG and DG TRADE showed interest in participating in the group
5; 
April to June 2008 Public on-line c onsultation of interested parties 
April to July 2008 Provision of expertise by external consultants 
June 2008 Public Hearing  
July 2008 2nd Inter-Service Steering Group 
September 2009 3rd Inter-Service Steering Group 
1.2. Consultation and expertise 
Consultation within the Commission: The following services have been consulted: SG, LS, BEPA, 
DGs AIDCO, BUDG, COMM, DEV, EAC, ELARG, ENTR, EUROSTAT, RELEX and TRADE. 
External Expertise: DG INFSO concluded a service contract with Technopolis / Media Consulting 
Group  to acquire external expertise on and input for the impact assessment and the ex-ante evaluation. 
The assignment included an analysis of the underlyi ng problems, the comparative assessment of policy 
options and an assessment of potential impacts of the policy options (see Annex 1).  
Consultation of Stakeholders – Stakeholder meetings: Consultations with the main stakeholders, 
such as participants in the current MEDIA 2007 pr ogramme, stakeholders from third countries and 
MEDIA committee members6 - have been extensive7: 
• On 6 February 2008 a meeting of the Cinema Expert group8 on Strengthening of the external 
dimension of Audiovisual Policy took place . National authorities’ and e xperts' views were heard; 
                                                 
4 http://intra.infso. cec.eu.int/A2/what_we_do/media_int/mundus/   
5 http://intra.infso. cec.eu.int/A2/what_we_do/media_int/mundus/   
6 According to Article 11 of the current MEDIA 2007 pr ogramme Decision, the Commi ssion is assisted by a 
committee (Decision n°1718/2006/CE of 15/11/2006). 
7  Consumers were not consulted sepa rately. However, the public hearing on 25 June 2008 in Brussels and the online 
questionnaire was given wide publicity (for example on 10 June 2008 a press release was published, IP/08/909) and 
neither were restricted to profe ssionals. Several individuals particip ated in the public consultation. 
 
EN - 11 -   EN • On 11 February and 18 May 2008 the EFADs (European Film Agencies' Directors) were informed; 
• In February 2008, in the context of the Berlin Film Festival , and in April 2008, in the context of the 
Udine Far East Film Festival,  consultations were he ld with professionals; 
• On 17 April 2008 the audiovisual experts from the EFTA were informed. 
• On 25 April, 27 June and 28 July 2008 the MEDIA committee9 was informed. Delegations were 
invited to send their written comments to the Comm ission and to hold bilateral consultations with 
the Commission, if they so wished; 
• On 19 May 2008, Ministers in charge of audiovisual met during Europe Day in Cannes on the 
theme "Cinema: building a world of exchanges"10 and a conference with approximately 230 
stakeholders from all over the world took pl ace to present and discuss possible means of 
international cooperation; 
• On 19 June 2008 the German Federa l Film Board (FFA) invited the Commission to hold a bilateral 
consultation with national st akeholders in Berlin;  
• On 25 June 2008 a public heari ng with approximately 120 professionals took place in Brussels. The 
hearing focused on the key role of international cooperation for the European audiovisual industry, 
provided an outline of a possible future programme  MEDIA Mundus and three international expert 
panels discussed in particular questions re lated to cooperation between professionals and 
circulation of audiovisual works11; 
• On 8 July 2008, the French Presidency of the EU organised a colloquium on the topic Quelle 
politique de coopération cinématogr aphique pour l’Union européenne?12 Four international expert 
panels discussed the challenges and opportuniti es of international cooperation programmes for 
training, co-production, dist ribution and exhibition.  
• From 9-11 July 2008 the evaluation of project s submitted under the call for proposals for the 
Preparatory Action MEDIA International took place.  Intensive discussions were held with the 
independent experts (evaluators) on the proj ects submitted and on their recommendations for 
modifications to any future actions.  
Consultation of Stakeholders – Online Consultation: A public on-line consultation was launched on 
10 April 2008 using the Commission’s Interactive Po licy Making tool (IPM). The consultation lasted 
until 25 June 2008. Wide publicity was given to this public consu ltation by placing it on the “Your 
Voice in Europe” website. Moreover, the MEDIA Desks13, delegations of the European Commission 
and diverse expert groups circulated the questio nnaire among professionals world-wide. 259 replies 
from 51 different countries were received. The opinions expressed were analysed in the context of this 
impact assessment and the results and a detailed anal ysis of the public cons ultation were published on 
the Internet (see Annex 2)14.  
Consultation of Stakeholders – Interviews: In the context of the research for their Report, 
Technopolis / Media Consulting Group  conducted 54 interviews with  audiovisual professionals from 
around the world, covering all relevant parts of the audiovisual value chain, see exhibit 2.  
                                                                                                                                                         
8 The Cinema Expert group was created in 2001 to provide  expertise to the Commission when drafting implementing 
measures on audiovisual pol icy (COM(2001) 534 final) - http://ec.europa.eu/avpolic y/reg/cinema/index_en.htm  . 
9 According to Article 11 of the current MEDIA 2007 pr ogramme Decision, the Commi ssion is assisted by a 
committee (Decision n°1718/2006/CE of 15/11/2006). 
10 For text of Declaration of European Audiovisual A ffairs Ministers and of the European Commission member 
responsible for the Informati on Society and Media, see: 
http://ec.europa.eu/informati on_society/media/docs/overvie w/news/cannes2008/cannes_2008_en.pdf   
11 http://ec.europa.eu/information_societ y/media/mundus/public_hearing/index_en.htm   
12 http://www.colloquecinemaeuropemonde.fr/   
13 The MEDIA Desks & Antennae represent the MEDIA programme in the Member States, as set out in Article 12 of 
the MEDIA 2007 decision (Decision n°1718/2006/CE of 15 /11/2006). Their objective is to promote the 
Programme in their country/ region and provide informa tion to professionals of the audiovisual industry on its 
implementation. Currently, the network  comprises  43 desks and antennas: 
http://ec.europa.eu/information_societ y/media/overview/who/desks/index_en.htm   
14 http://ec.europa.eu/information_ society/media/mundus/index_en.htm   
 
EN - 12 -   EN Exhibit 2: Distribution of interviews according to  region and type of actors in the audiovisual 
value chain15 
Region Africa Asia Australia CIS EU Latin America Near East North America16 Total
Broadcaster 1   1 1    3 
Distributor / Sales Agent 1   1 9 2   13 
Exhibitor 1   1 2    4 
Producer 3 1   1    5 
Public support body 4 2 2 1 10 4 1 5 29 
Total 10 3 2 4 23 6 1 5 54 
 
1.3. Main results and follow-up to the consultations 
The main results of the consultation process can be summarised as follows: 
– Many professionals strongly support strengthened co operation between European and third country 
professional in the audiovisual sector. 
– The consulted stakeholders expressed a need for action that should mainly focus on training, 
distribution, the facilitation of co-productions and ci rculation of audiovisual works (including  new 
platforms, such as VOD17 and IPTV18), and film literacy.  
Stakeholders were given ample oppor tunities to contribute to and comment on different policy options. 
This Impact Assessment report closely reflects thei r views. The policy options described here have 
received feedback from a representative sample of relevant parties and actors from the audiovisual 
sector. 
1.4. The opinion of the Impact Assessment Board 
On 27 August 2008 the draft of this Impact Assess ment Report was discussed in oral procedure with 
the Impact Assessment Board. On 01 September 2008 the Impact Assessment  Board delivered its 
opinion / recommendations. The following general recommendation was given: " The report should 
strengthen the rationale for the creation of a ne w instrument MEDIA Mundus and better explain why 
the extension of the existing initiative MEDIA 2007 woul d be neither desirable nor feasible. It should 
develop and analyse alternative options for the alloca tion of funding across the value chain and assess 
their cost-effectiveness as required by the Implem enting Rules of the Financial Regulation. The report 
should also discuss the risks (in the sense of the Fi nancial Regulation) which would be connected to 
the implementation of this programme. During its meeting with the board DG INFSO agreed to revise 
the impact assessment on this basis".   
In response to these recommendations, a number of m odifications were made to the Report and the 
analysis of impacts of options 1, 2 and 3 was furt her substantiated with the requested elements in 
section 4.1.-4.5., additional elements regarding cost  effectiveness, resource intensity and a comparison 
of options (including the rationale for creating a ne w instrument) were introduced in section 5, and in 
section 6 indicators were added. In section 5 additio nal explanations have be en provided as regards 
lessons learned from evaluations of the previ ous MEDIA programmes and how they could be 
transferred to a MEDIA Mundus Programme. The de finition of the objectives (global, specific and 
operational) proposed for MEDIA Mundus in secti on 4.3. (including an explanation of budget 
                                                 
15 Source: Technopolis / Media Consulting Group, 2008. 
16 All interviews were conducted  solely with Canadian  counterparts, no US organi sations were interviewed. 
17 Video on Demand. 
18 Internet Protocol Television: Broadcas ting of audiovisual content through the Internet.  This covers several types of 
video content, such as live television broa dcast, video on demand, catch-up TV, etc. 
 
EN - 13 -   EN allocation and deliverables per specific and ope rational objective) now follows the standard 
terminology of the ex-ante evaluation requirements. Annex 11, actions to be implemented, was added. 
The (additional) technical comments made by the IAB were duly taken into account in the revised 
version. In September 2008 DG BUDG was consulte d on methodological issues relating to ex-ante 
evaluation, in particular sections 5 and 6 and c onfirmed that this report fully complied with DG 
BUDG's ex-ante requirements. The revised repor t was resubmitted to the IAB on 26 September 2008 
and the IAB issued its final recommendations on 13 October 2008 which state that 
"The report should further explain why it is nece ssary to create a new instrument, rather than 
integrating international activities in the exi sting programme MEDIA 2007. It should also 
demonstrate with greater precision the (cost-) e ffectiveness of different scenarios in achieving the 
objective of 7% market share of EU audiovisual works in third countries and vice versa. Finally, it 
should provide a clearer explanation of the added value and justification for the number of outputs 
under each action line in terms ff the expected benefits ." 
The respective modifications were made to the Report a nd are to be found in particular in sections 4.3, 
4.4 and 5.6 as regards the clarification why the envi saged international activities cannot be integrated 
into the existing MEDIA 2007 Programme. Concerning greater precision of (cost-) effectiveness in scenarios 1 and 2 in meeting the 7%-objective, sections 4.5 and 5.2 were modified. Additional 
clarification was provided as regards added value a nd justification for the number of outputs under 
each action line, i.e. in exhibits 21 to 26. Finally, the text was shortened as requested and the concept 
of cost-effectiveness and administrative cost s was more rigorously used in section 5. 
2. S
ECTION 2: PROBLEM DEFINITION AND RAT IONALE FOR INTERVENTION  
2.1. Context: Introduction - value chain of the audiovisual industry  
The life cycle of a film19 is a long and complex process for whic h six steps can be identified (see 
exhibit 3). A myriad of actors are involved although ce rtain of them have a more important role, such 
as scriptwriters, producers, distributors, outlets fo r dissemination (cinema theatres, TV channels, DVD 
and VOD). Their interaction (see Annex 3) determines the different market structures for the 
audiovisual sector. Indeed, there is not a sole cinema or audiovisual market but many of a 
heterogeneous nature (see Annex 4). 
 
Exhibit 3: Value chain of audiovisual industry - Life cycle of a film20 
 
    
 
  
 
                                                
 
19  This study covers audiovisual works in the meaning of the Audiovisual Media Services Directive" (AVMSD), (see 
footnote 2). However, the main focus of the study and a future expenditure programme are cinema; therefore 
information is on occasion specific to cinema/film. 
20 Source: INFSO/A2. Pre-production Production Post-productionRights 
ManagementDistribution Exhibition
Producers
• Formulating ideas• Acquiring rights• Scriptwriting
• Seeking financing
• Seeking creative
talents
• Preparing budget
• Preparing
production scheduleProducers/
Directors
• Direction• Production•F i l m i n g• ControllingProducers/
Film laboratories
• Editing• Soundtracking• Effects•T i t l eOwner of rights
• Sale of rightsDistributor, sales
agent
• Advertising/
promotion
• Sales/distribution• Synchronisation
• BundlingVarious exhibiton
platforms, such as:
• Cinema screening•T V  s c r e e n i n g• DVD• VOD
• M obile TV
•I P T V•W e b  T VPre-production Production Post-productionRights 
ManagementDistribution Exhibition
Producers
• Formulating ideas• Acquiring rights• Scriptwriting
• Seeking financing
• Seeking creative
talents
• Preparing budget
• Preparing
production scheduleProducers/
Directors
• Direction• Production•F i l m i n g• ControllingProducers/
Film laboratories
• Editing• Soundtracking• Effects•T i t l eOwner of rights
• Sale of rightsDistributor, sales
agent
• Advertising/
promotion
• Sales/distribution• Synchronisation
• BundlingVarious exhibiton
platforms, such as:
• Cinema screening•T V  s c r e e n i n g• DVD• VOD
• M obile TV
•I P T V•W e b  T V
 
EN - 14 -   EN   
2.2. What are the nature and the scope of the problem? 
Europe has a particularly active cinema industry, when measured against classic indicators (see exhibit 
4). In 2006, Europe produced 883 films, in second place behind India (1,016 films) and in front of the 
United States (485 films)21. In 2006, Europe was the third largest cinema market in the world (926 
million cinema tickets sold) and the second in term s of box office takings, just behind India (3,997 
million tickets sold), and the United States (1,448 million tickets)22. 
 
 
Exhibit 4: European film market, 2004 to 200623 
 Number of feature films produced Number  of screens Number of admissions (million) 
2004 770 28,727 1,006 
2005 815 29,020 894 
2006 883 29,024 926 
 
Despite this, the European industry struggles with the major problem of poor circulation of European 
films on international markets and of foreign films (other than those produced by Hollywood studios) 
on European markets. European films, in contr ast to those produced by Hollywood studios, are not 
readily exported. This is evidenced by the low mark et share of European films on foreign markets (see 
exhibits 5 and 6). These figures represent some impo rtant markets; however, the average market share 
of European films in third countries is estimated to amount to 4%24. 
 
Exhibit 5: Market share European films versus US -American films in major third countries in 200625 
 Market share of European film s Market share of US films 
Mexico 3% 81% 
Argentina 5.5% 82% 
Brazil 3% 86% 
South Korea 3% 47% 
India 2% 10-12% 
Japan 5-9% 50% 
USA 3.3% 94.5% 
 
                                                 
21 SCREEN DIGEST. 
22 SCREEN DIGEST. 
23 Source: Centre National de la Ci nématographie, France (CNC) 2008. 
24  Source: UNESCO, Audiovisual markets in the developing worl d- Statistical assessment of 11 countries , Paris, 
2006, http://unesdoc.unesco.org/images/0014/001461/146192e.pdf. 
25 Source: Instituto Mexicano de Cinematografìa (IMCINE) , Korean Film Council (KOFIC ), Instituto Nacional de 
Cine y Artes Audiovisuales, Argentin a (INCAA), Unifrance, Motion Pictures Association of America (MPAA). 
 
EN - 15 -   EN Exhibit 6: Breakdown of admissions in the Euro pean Union admissions by origin of films 200726 
US/EUR
 inc 3,5%
EUR inc/US 6,3%FR 8,5%
GB 6,7%IT 4,1%DE 3,9%Other Eur 4,5%
ES 1,2%Rest of World 2,2%
US  59,1%
Total US + US/EUR inc 62,7%
Films from non European countries other than Hollywood productions face similar difficulties on the 
European market, see exhibit 7.  
Exhibit 7: Top 10 third country films (excluding the US) in the EU- 2002 to 200627 
Rank Country Number of 
feature films 
produced  Number of 
films released 
in Europe Market share 
of admissions 
in Europe28 
1 Canada 484 114 0.55% 
2 Australia 122 42 0.32% 
3 Japan 1,663 122 0.29% 
4 India 4,464 248 0.25% 
5 China 1,042 43 0.13% 
6 Argentina 275 82 0.12% 
7 Hong Kong 359 37 0.09% 
8 South Korea 427 56 0.08% 
9 Russia 610 76 0.08% 
10 Turkey 110 39 0.06% 
Top 10 total  9,556 859 1.96% 
                                                 
26 Source: European Audiovisual Observatory (FOCUS 2008). 
27 Source: European Audiovisual Observ atory (FOCUS 2008) and SCREEN DIGEST. 
28 Column 3 is not related to columns 1 and 2 but relate s to the overall number of admissions/attendance in Europe. 
 
EN - 16 -   EN On the French exhibition market, wh ich is seen as the most open to  diversity within the European 
Union, only 541 films from Asia, Africa and Latin America had a première showing between 1992 
and 2003, as opposed to 1,967 from North America, 1,746 French films and 1,201 from Europe. Only 
20 Indian films were shown in France during this pe riod, 4 Thai films, 31 Korean films, 23 Mexican 
films (this represents a tiny proportion of the national production from these countries during this 
period). This under-showing is even more noticeable  when one considers the number of screenings 
(i.e. number of times the film was shown in ci nemas) as a reference criterion. Asian cinema 
represented 7.26 % of the number of films released during that period, but only 2.05 % of the number of screenings. This discrepancy affects also La tin-American productions (share in the number of 
screenings lower by 1.39 points than films released ). Conversely, domestic fi lms and American films 
represent a share in screenings higher than their sh are in the number of films (by nearly 20 points in 
the case of American films). For additional informat ion on market shares in the European Union, see 
Annex 5. 
Regarding the circulation of films on televisi on, DVD, VOD, IPTV available data is patchy
29. In 
general the television market is  dominated by domestic, European30 and US productions and this is 
even more pronounced for video.  
2.3. What are the underlying causes behind these problems? 
Market size and fragmentation: As has been demonstrated by the new theory of international trade31, 
in a state of imperfect competition, the size of the original market predominates in determining the structure of international exchanges: Consequent ly, the concentration of performance of European 
works on their sole domestic market, by reason of the persistent fragmentation of European 
audiovisual markets, affects their competitiveness in third-country market s, particularly with regard to 
competition from American works. This also applies to non American foreign films in Europe
32. These 
imbalances also concern the market for televisi on resources (advertising resources, public resources 
and subscription resources, See exhibit 8). Thus , remaining largely compartmentalised within 
domestic markets, whose relative size is modest, European and foreign works are doubly handicapped 
with respect to competition from American work s on foreign (and European) markets. A detailed 
explanation of this phenome non is given in Annex 6.  
Exhibit 8: Comparison of TV advertising spen d in the EU versus USA in 2006(in million Euro) 33 
USA GB Italy Germany EUR 15 
49,823  5,654  4,599  4,571  26,785  
 
The linguistic diversity  of the European audiovisual market reinforces the problem of fragmentation 
and market size. In general, language transfer  (generally dubbing or subtitling) is a necessary 
condition to enable circulation within Europe and on an  international level. In  cinema, and even more 
so on television, the general public prefers the traditional “comfort” of National language. The high 
costs of dubbing and subtitling are a major obstacle for di stributors, in particular in restricted linguistic 
                                                 
29 For further reference: European Audiovisual Observatory (FOCUS 2008) 
30           
http://europa.eu/rapid/pressReleasesAction.do?ref erence=IP/08/1207&format=H TML&aged=0&language=EN&gu
iLanguage=en   
31 For any goods, countries whose market si ze is relatively larger than that of their commercial partners will have a 
relative advantage and will therefore have a strong economic  interest in specialising in the production of those 
goods, see Krugman, (1979), Siwek and Wildman (1987), Lancaster (1991). 
32  As an example to demonstrate the scope of the problem it is useful to compare the number of screenings / entries, 
which highlights that the US and European markets are of completely different orders of magnitude. In fact, with 
1,400 million entries in 2007, the market for screenings in the USA is almost 10 times the size of any major 
European market, on the other hand the largest European national market, France, had 177 million entries in 2007; 
i.e. the largest European national market is tiny compared to that of the US. 
33 Source: European Audiovisual Observatory (OEA), 2007. 
 
EN - 17 -   EN areas, to target non national markets. The averag e costs (for a 90 minutes film) in big markets like 
Germany, Spain, France and Italy are 5.300 Euro for subtitling and 34.900 Euro for dubbing whereas 
in small markets like Finland, Sweden and Denm ark prices are around 2.600 Euro for subtitling and 
52.000 Euro for dubbing34. 
Distribution structures in Europe are extremely disadvantage ous for exporting audiovisual products. 
Contrary to their large vertically integrated multin ational US counterparts, distributors in Europe are 
mostly small. In addition, within each national market of the European Union, other types of 
organisational structure exist for distribution (independe nt distributors, distributors integrated within 
TV channels, distributors vertically integrated into a cinema group, exhibitors with distribution 
activities etc.). Thus, the distribution sector in Europe is highly fragmented without any integrated 
pan-European companies. Moreover, European audi ovisual works are first released on their national 
markets and, if this is a success, other European non-national distributors may distribute the film in 
another European country. This strate gy generates a ‘timing constraint’, i.e. the release of the film over 
several months/years, thus increasing the risk and cost of distribution: All the more so as film 
distribution requires heavy investments upfront35 without any guarantee on returns. Since the US 
majors36 have a greater degree of control over distribution37, they are able to organise the release of 
their films on international markets in a short period of time, improving the efficiency of the 
promotion and marketing. In addition, in a large number of countries around the world, the distribution segment is to a large extent in the hands of US majors, either through distribution subsidiaries or 
through a joint venture with a powerful domestic di stributor, thereby ensuring privileged distribution 
for the American majors. For example, in Brazil, Argentina and Mexico, the six Hollywood majors are 
the top six distributors, whilst in South Korea th ree of the Hollywood majors are in the top seven 
distributors
38. 
Financing Structures of European audiovisual works depend h eavily on public resources and national 
distributors. This strongly favours the creation of works geared towards national audiences and 
hampers the export of audiovisual works as well as the participation of non-European capital.  
Under-funding of European audiovisual companies : In the European audiovisual industry, revenues  
from European audiovisual works are limited main ly to television sales and box office receipts from 
domestic markets. This characteristic, combined with the economic specificities of film production 
(high-level risk, hazards of demand, importance of  fixed and sunk costs), explains the chronic under-
funding of European audiovisual companies and th e central role of national public aids and legal 
investment obligations imposed on domestic TV Broadcasters in the financing of European 
audiovisual works. It also explains in part why th ere is little impetus for seeking foreign investment or 
developing strategies for export. 
Lack of equity: European audiovisual works suffer from a lack of funds meaning that financing 
depends on obtaining pre-financing (often from pub lic funds). This situation means that seeking 
additional non-domestic or non-European finance is  rarely vital once the pre-financing has been 
awarded, and prevents the development of effec tive export strategies. This also however impacts 
negatively on the economic viability of the company and its capacity to attract private investment.  
Lack of information / data: Information on third country audiovisual markets is scarce, awareness is 
low and available data is limited. It is also difficult for audiovisual professionals to establish 
networking abroad given distances a nd legal and linguistic barriers. 
                                                 
34  Study on dubbing and subtitling needs and practices in the European audiovisual industry 14.11.2007, Media 
Consulting Group in partnership with Peacefulfish , published on http://intra.infso.cec.eu.int/   
35 Minimum guarantee and pr int & advertising costs. 
36 Buena Vista International, Columbia Tr istar, Paramount Pictures, Universal, 20th Century Fox, MGM, Warner 
Bros. 
37 Competition policy is not an instrument to remedy this pr oblem and it is not a tool for industrial policy. It is a 
response to market behaviour and not to (Europe an) market failure. See for example UIP case 
http://europa.eu/rapid/pressReleasesAction.do?reference=IP/99/681&format=HTML&aged=0&language=EN&gui
Language=en   
38 For further details see impact assessment stud y (Technopolis) in Annex 1, page 10, exhibit 5. 
 
EN - 18 -   EN Viewing habits:  Depend on personal impressions and emotions  that are linked to previous positive 
experiences. Experience is also cumulative and depe nds on individuals but also  generations (acquired 
taste) as well as on (regional) cultural traditions. In a context where viewing is mainly dominated by 
US and partly by domestic production, these charact eristics are important for determining the demand 
for audiovisual works and represent a significant obstacl e to diversity of audiovisual works. In this 
context, it is of paramount importance for the audien ce (in particular young audiences) to be aware of 
and seek a choice of culturally diverse audiovisual works.  
2.4. Who is affected, in what ways and to what extent? 
• European Professionals: European audiovisual professionals, in view of the problems explained 
above, are caught in a vicious circle:  
– the financial fragility of production and distribution structures combined with the poor 
circulation of works on foreign markets aff ects adversely the economic viability of all 
segments of the value chain,  
– the implementation of an export strategy c ould increase the circulation of European 
works and would thereby address the problem of financial fragility, improve profitability 
and therefore increase overall competitiveness, 
– nevertheless, this is in itself limited by the current structure and financial weakness of the 
European audiovisual industry. 
This vicious circle is of great concern since the potential of development (and consequently the 
increase of revenues) on the "old" Eu ropean markets is limited. In the long term, the future of the 
European audiovisual industry could clearly be compromised. 
• Consumers: There is limited international visibility fo r European films and limited visibility of 
foreign audiovisual works in the EU. This limita tion is often perceived as the consequence of 
economic dysfunctions in th e supply and screening conditions for non-domestic (and non-
American) works but it should not simply be interp reted as a possible lack of appetite of the public 
for foreign works. In fact, a study conducted by  the European Audiovisual Observatory highlights 
the growing importance of films from third countries39. 
• European Union credibility / position vis-à- vis international policy in the sector : The European 
Union was a major player in the conception and adoption of the UNESCO Convention on the 
Protection and the Promotion of the Diversity of Cultural Expressions40, which entered into force 
on 18 March 2007. Its aim is to "strengthen intern ational cooperation and solidarity so as to favour 
the cultural expressions of all countries". The poor  circulation of third country cinema works on 
European markets does not reflect favourably the aims expressed by the European Union. The 
conference Cultural Diversity – Europe's Wealth. Bringing the UNESCO Convention to Life , 
organised in Essen during the German Presidency of the EU41, highlighted the expectations of 
Europe from third country audiovisual professionals. In this context, the success of the first year of 
the Preparatory Action MEDIA International illustra tes the needs of European and third country 
professionals.(See section 2.6. and Annex 9 ) 
2.5. How would the problem evolve, all things being equal? 
The international audiovisual landscape has change d significantly over the last two decades, notably 
from the impact of technological developments. Ne w players have emerged, requiring more content 
production for emerging markets where financ ial growth is extremely promising.  
                                                 
39 The place of third country film and audiovisual works in European markets; M.Kanz ler and A. Lange, EAO 2008; 
http://www.obs.coe.int/online_publica tion/reports/thirdcountry_av_works.pdf.en   
40 http://portal.unesco.org/en/ev.php-URL _ID=31038&URL_DO=DO_TOPIC& URL_SECTION=201.html   
41 April 2007 see http://www.unesco. de/1338.html?&L=0   
 
EN - 19 -   EN 2.5.1. Missed potential for opportuniti es on third country markets 
During the last fifteen years, audiovisual markets of many third countries have largely improved their 
economic results. Multi channel TV  has developed in numerous Latin  American and Asian countries. 
This has been mirrored by the removal of instituti onal barriers and increased resources. Asia Pacific 
stands out as exceptionally dynamic (India and China) . This development of multi channel TV is an 
opportunity for the broadcasting of content.  
In many regions the cinema theatre market has also grown in the last decade42. In fact, many markets 
show remarkable increases often linked to the creation of multiplexes . The revenues needed to finance 
this growth require foreign investment. Positive effe cts of this growth include increased cinema going, 
and therefore increased revenues; this growth is lik ely to continue over the next 10 years (see Annex 7 
for further details). 
Structural weaknesses affecting the circulation of European works on foreign markets and inadequate 
financing of European firms prevent the European audiovisual industry from benefiting fully from this 
new international expansion of  opportunities. This situa tion is regrettable since: 
– The majority of the European audiovisual market s (with the exception of the new Member States) 
are "mature" markets with little prospect of growth in revenues.  
– The recent construction of cinema theatres launc hed on a massive scale in many third countries 
means that these countries, unlike Europe or the Un ited States, will benefit from advances in digital 
projection since they have not invested (as have  European cinema theatres) in an upgrade to 
multiplexes but will switch directly to digital multiple xes. Indeed, digital rollout can be expected to 
happen rapidly and on a wide scale in these countries; this will in turn reduce the costs for film 
distribution.  
2.5.2. Insufficiency of existing internationalisation efforts 
There are three types of internationalisation activities, namely (1) international film funds, (2) co-
production treaties and (3) existing European Union programmes in the area of audiovisual support 
(MEDIA 2007 , Euromed Audiovisual  and EU – ACP support programme for cinema and the 
audiovisual industry) 
International film funds: There are several funding bodies supporting internationalisation activities 
(see Annex 843). These funds44 cover all geographic zones of the worl d and all parts of the value chain. 
However, budgetary allocations are very limited. A ltogether these funds had less than 10 million Euro 
at their disposal in 2007. In comparison, financial support for the film industry in Austria amounted to 
more than 12 million Euro in 2007 – exceedi ng the budget of the international funds. 
Co-production treaties: An international co-production is a film made by production companies from 
different countries.  Official co-productions are made possi ble by co-production treaties between 
national governments and stipulate the legal framewo rk in which producers may work together. They 
open national sources of film funding to foreign pro ducers. International co-productions also occur 
outside the framework of co-production treaties45. 
Existing European Union programmes in the area of audiovisual support: MEDIA 2007:  
                                                 
42 This does not apply to Africa. For further refere nce see impact as sessment study (Technopolis) page 11. 
43 For further reference: Appendix D of the impact assessment study (Technopolis). 
44 Ibermedia, Balkan Fund, Produire au  Sud, Fonds du Sud, Hubert Bals F und, World Cinema Fund, Göteborg Film 
Fund, Southern Vision,  Visions Sud-Est. 
45 http://merlin.obs.coe.int/  ; http://www.cnc.fr  49 bilateral co-production treaties between EU Member States and 109 
co-production treaties between EU Member States and thir d countries can be identified. For further reference, 
Apendix C of the impact a ssessment study (Technopolis). 
 
EN - 20 -   EN The MEDIA 2007  programme (2007-2013)46 is the fourth multi-annual programme for support to the 
European audiovisual industry since 1991. Its general objectives are to: 
– (a) preserve and enhance European cultural and linguistic diversity and its cinematographic and 
audiovisual heritage, guarantee its accessibility to  the public and promote intercultural dialogue; 
– (b) increase the circulation and viewership of Euro pean audiovisual works inside and outside the 
European Union, including through greater cooperation between players; 
– (c) strengthen the competitiveness of the European  audiovisual sector in the framework of an 
open and competitive European market favourable to employment, including by promoting links 
between audiovisual professionals. 
Article 8 of the MEDIA 2007 Decision sets out the c onditions for, on the one hand, participation of 
European third countries in the programme and, on the other hand, cooperation with non-European 
third countries: 
– Full participation in MEDIA 2007 is limited to certain European third countries. Currently 
Norway, Iceland, Liechtenstein, Switzerland and Croatia participate in MEDIA 2007. They have 
to pay an annual financial contribution for their membership ("entry ticket"). 
– Limited participation in the field of training is also possible.  
– Cooperation is possible with Western Balkan countri es and with other third countries which have 
concluded Association and Coope ration Agreements with the European Union incorporating 
clauses on the audiovisual sector. Only one re quest for cooperation under Article 8 of the 
MEDIA programme has been received to date and is currently pending.  
All forms of participation and cooperation requi re supplementary appropriations and specific 
arrangements to be agreed upon, necessitating lengt hy negotiations and legislative procedures. 
Although MEDIA 2007  creates synergies on a pan-European level and foresees the possibility for 
cooperation, it is mainly an intra-European pr ogramme aiming at increasing co-operation and 
circulation among Member States47. Its main focus is thus not on the international, but on the internal 
market dimension.  
Existing European Union programmes in the area  of audiovisual support: EUROMED Audiovisual 
In the 1995 Barcelona Conference Foreign Affa irs Ministers from the European Union and 12 
Mediterranean Partners agreed to form the Euro-M editerranean Partnership to nurture closer economic 
and cultural ties between the southe rn Mediterranean and Europe. In 2000, the European Commission 
launched the regional Euromed Audiovisual I Pr ogramme and in 2006, the current Euromed 
Audiovisual II Programme48. The current programme budget is 15 million Euro for the period 2006 to 
2008. The programme ends in 20 08 and its relaunch is curren tly foreseen for 2009. Euromed 
Audiovisual II is geared towards professionals, institutions and national organizations in the 
audiovisual field from the following countries and territories: Algeria, Egypt, Jordan, Israel, Lebanon, Morocco, Syria, the Palestinian Authority, Tunisia and Turkey
49. The 15 Euromed Audiovisual 
projects concern training, development, promoti on, distribution and exhibition, backed up by a 
technical assistance structure50. 
Existing European Union programmes in the area of audiovisual support: EU – ACP  
                                                 
46 See http://eur-lex.europa.eu/LexUri Serv/site/en/oj/2006/l_327/l_32720061124en00120029.pdf   
47  Countries that are eligible for participation in the MEDIA 2007 programme are an integral part of the European 
audiovisual area and are therefore enabled, if they wi sh and taking into account budgetary considerations or 
priorities of their audiovisual indust ries, to participate in the programme. 
48 http://www.euromedaudiovisuel.ne t/general.aspx?treeID=4&lang=en   
49 All those activities have the aim of exchanging know- how, networking the South Mediterranean professionals and 
institutions and reinforcing th eir contacts with Europe. 
50 To reinforce the capacity of the South-Mediterranean region 's public authorities, to improve the organization of the 
audiovisual sector and to adopt  measures to deal with new developments and new threats. 
 
EN - 21 -   EN The EU-ACP support programme for ci nema and the audiovisual industry51 aims to promote the 
development and structuring of the audiovisual industries in the 79 ACP (Africa, Caribbean and 
Pacific) countries. The Programme started in Octo ber 2007 for 3 years with a budget of 6.5 million 
Euro. The programme is managed and implemented by the ACP Group of States Secretariat with the 
assistance of a Programme Management Unit. It is  funded under the 9th Eu ropean Development Fund 
(EDF). It supports training, film production,  film distribution and film promotion.  
2.6. Events triggering the initia tive - the Preparatory Action MEDIA International   
On 13 December 2007 the European Parliament adopted, in the 2008 budget, a Preparatory Action 
MEDIA International with a 2 million Euro budget to  focus on European Union relations with third 
countries' audiovisual markets. Unlike existing programmes, the Preparatory Action is based on the 
principle of mutual benefit for professionals fr om European Union Member States and from third 
countries ; the coordinator of the project needs to be a resident of an European Union Member State, 
but projects have to be jointly implemented by professionals from th ird countries and the European 
Union. 
On 4 April 2008 the Commission launched a call for proposals52, which closed on 13 June 2008. This 
call contained three action lines: (1) Continuous Tr aining, (2) Promotion of cinematographic works 
and (3) Support of Cinema Networks. Of the 33 propo sals received, 26 were found to be eligible; 19 in 
the field of training, 6 for promotion/distribution and 1 cinema network. In total, Community support 
required by the 33 submitted projects amounted to 4.62 million Euro, Community support required by 
the 26 eligible projects amounted to 3.13 million Eu ro, compared to 1.98 million Euro available (see 
exhibit 9). It can be seen that this call, in spite  of the short period for fi nding partners and submitting 
proposals, was significantly oversubscribed.  
Exhibit 9: MEDIA International Preparatory Action 2008: proposals received and supported53 
 Proposals Support  
(million Euro) Eligible Proposals Support 
(million 
Euro) 
Continuous training 24 2,49 19 1,75 
Distribution/Promotion 8 1,43 6 0,68 
Cinema Networks 1 0,70 1 0,70 
Total 33 4,62 26 3,13 
The evaluation process for the MEDIA Internationa l Preparatory Action was concluded on 24 July 
2008 and the list of selected projects can be found in Annex 9. 
• In the field of continuous training54, 19 eligible projects were s ubmitted by coordinators from 
Belgium, France, Germany, Hungary, Ireland, It aly, Luxemburg, Rumania, Spain and the United 
Kingdom. Partner institutions in third countries or iginate inter alia from Argentina, Brazil, 
Uruguay, India, Indonesia, Jamaica, Israel, Lebanon,  Tunisia, Iraq, Canada, US, Armenia, Georgia, 
Azerbaijan, Moldova and Turkey. The majority of  the proposals were for new training projects, 5 
of them extended existing training programmes (supported under MEDIA 2007) to participants 
                                                 
51 http://www.acpfilms.eu /index.php?id=23&L=1   
52 http://ec.europa.eu/information_society/media/prep_action/call/index_en.htm   
53 Source: INFSO/A2, 2008. 
54 Training under MEDIA supports the creation of pan-Europ ean training networks to help professionals in the 
audiovisual industry enhance their competence in the in ternational market. Separate  action lines support initial 
training initiatives for students with  no experience in the sector, and continuous training for experienced 
professionals of the audiovisual industry. 
 
EN - 22 -   EN from third countries. The vast majority of training projects was open to professionals from all 
European Union Member States. 
• In the field of distribution and promotion , 6 eligible projects were submitted by coordinators from 
Bulgaria, France and by pan-European associations like Europa Cinemas , Europa Distribution  and 
Club des Producteurs européens . Partners originate from China,  Japan, South Korea, India, 
Morocco, Mexico, Chile, Bosnia and Herzegovina. 
• One cinema network  submitted a proposal, comprising 1 46 cinemas from 19 third countries and 
230 cinemas from the Europa Cinemas  network.  
2.7. Does the EU have the right to act?  
Treaty Base:  Several Treaty provisions give the European Union the right to act:  
• Article 157 EC: " The Community and the Member States shall ensure that the conditions necessary 
for the competitiveness of the Co mmunity's industry exist. For that  purpose, their action shall be 
aimed at: speeding up the adjustment of industry to structural changes …". Under the AETR55 
doctrine the European Community has the competence to establish  contractual links with third 
countries over the whole field of  objectives defined by the treaty . Therefore Article 157 is 
also the legal basis for activities goi ng beyond the Community borders. 
• According to Article 150 (2) EC, Community action in  the field of vocational training shall aim to: 
"facilitate adaptation to industrial changes, in  particular through vo cational training and 
retraining, and improve initial and continuing vocati onal training in order to facilitate vocational 
integration and reintegration into the labour market" . Under Article 150 (3), " the Community and 
the Member States shall foster cooperation with third countries ". 
• Under Article 149 the Community can support a policy " encouraging mobility of students"  and the 
Community …" shall foster cooperation with third countries …". 
• Article 151 (4) should be taken into account but wo uld not serve as a legal base. It stipulates that 
the Community " shall take cultural aspects into  account in its action under other provisions of this 
Treaty, in particular in order to respect and to promote the diversity of its cultures" . 
Subsidiarity and added value: Since certain actions to be proposed concern domains where the 
Commission does not have exclusive competence the principle of subsidiarity applies. 
• It is preferable for an international audiovisual initiative to take place at an European level where it 
can generate European added valu e. An European initiative woul d be complementary to initiatives 
by individual Member States. Although these initia tives are highly beneficial in themselves, they 
often remain at a bilateral leve l and cannot have the same pan European effect as a Europe-wide 
cooperation instrument. The European added value generated would be that the visibility of 
European films in the world would not be reduced  to a small number of films from mostly large 
Member States but create opportunities to increase  market share for Eu ropean films on third 
country markets. 
• The nature of the challenge that Europe faces me ans that coordinated action at European level is 
likely to create an European added value to regi onal or local initiatives because it enables a pooling 
of resources and greater geographical coverage, en compassing more than one or indeed several 
European country(ies). Many of the barriers to internationalisation can be better addressed at 
European level, in particular as regards the size, under-funding and fragmentation of markets, but 
also barriers specifically related to third countries su ch as lack of information etc. It would be more 
efficient, proportional and effective if these probl ems were addressed on a European level rather 
than by individual Member States. A joint appro ach including a critical mass of professionals from 
the European Union and from third countries, could lead to a greater positive impact, sustainable global networking and thus the gr adual change of global market  structures. This would be 
particularly beneficial for smaller Member States. The European Union is best placed to help 
                                                 
55 Case 22/70 Commission v Council (AETR) [1971] ECR 263. 
 
EN - 23 -   EN develop an international dimension for the Eu ropean audiovisual industry, thus creating a 
framework for cooperation and for improve d circulation of audiovisual works. 
• Action taken at the level of individual instituti ons or Member States and a Community programme 
in the field are not mutually exclusive – quite on the contrary – they often meet the same objectives 
and are complementary. Community action would ai m at reinforcing any national action taken in 
this field. It would be proportionate and w ould not go beyond what is necessary to achieve the 
objectives. 
• The generated added value would not detract from other Community programmes, in particular the 
MEDIA 2007 programme. MEDIA 2007 is clearly focused on the internal market and a new MEDIA Mundus Programme would be targeted towa rds the mutual exchange between European 
and third country professionals. Nor is there any overlap with the development programmes 
EUROMED audiovisual  and the audiovisual programme EU-ACP . All these initiatives are 
complementary. The enhancement of the circula tion of European audiovisual works worldwide 
would entail a specific European added value that transcends national policies. 
2.8. Summary of problems 
The major problem faced by the European audiovisu al industry on international markets is the poor 
circulation of audiovisual works.  
The reasons underlying this problem are the following: There is fragmentation of the different 
European markets on the basis of language but also market structure. There is a problem with the 
market size: since the original market size determin es the strength of the industry on the international 
stage and individually all the Member States (and th eir foreign counterparts) have relatively small 
markets (notably when compared to the USA market). The distri bution structure in Europe is 
composed of individual small companies unlike their large multinational vertically integrated US 
counterparts, hence the European audiovisual industr y is internationally not competitive. In addition, 
under-funding is one of the major causes of the pr oblems of European audiovisual companies; the 
financing of European audiovisual works de pends heavily on public resources and national 
broadcasters/distributors. Films are essentially fi nanced on national markets, limiting the need for 
foreign investment, but the funding of films solely from their national market also limits export 
strategies and possibilities.  
This has to be seen in the context of an inte rnational audiovisual landscape that has changed 
significantly over the last two decades, notably from the impact of technological developments like 
digital cinema, VOD or multi-channel digital television.  For certain foreign markets, this has created 
strong financial growth a nd promising investments in the audiovi sual industry and a consequent strong 
and growing demand for more audiovisual content.  However, structural weaknesses affecting the 
circulation of European audiovisual works on forei gn markets and inadequate financing of European 
audiovisual companies prevent the European audiovi sual industry from benefiting fully from this new 
expansion of international opportunities.  
There is a similar problem for foreign audiovisual works - other than those from Hollywood studios - 
on European markets. There is a demand on Europ ean markets for more diverse audiovisual content. 
These aspects also need to be evaluated in the li ght of the commitment of the European Union as a 
major player in the conception and adoption to the UNESCO Convention on the Protection and Promotion of the Diversity of Cultural Expressions, ra tified by the European Community together with 
12 Member States on 18 December 2006. 
The problem can be broken down in to two concrete elements; a lack of competitiveness for the 
different European players on international markets and a clear lack of consumer choice and cultural 
diversity on European and international markets. 
 
EN - 24 -   EN  
Exhibit 10: Problem tree 
 
 
 
 
3. SECTION 3: OBJECTIVES  
3.1. General policy objectives (global objectives) and sp ecific objectives 
Based on the problem definition in section 2, th e policy objectives of an activity related to 
international cooperation in the audiovisual field sh ould be twofold, as defined in the general policy 
objectives (global objectives) and detailed in the specific objectives below.  
General Policy Objectives (global objectives) 
Two general policy objectives are defined for international cooperation : 
• Objective 1: to increase the competitiveness of the EU audiovisual industry on global markets.  
• Objective 2 : to increase consumer choice and cultural diversity . 
Specific objectives 
Four specific objectives are detailed below. They ar e reflected in the proposed operational objectives / 
action lines described in section 4: 
• to increase information exchange and market intelligence and, in particular through training 
activities, facilitate networking between European and third country audiovisual professionals in 
order to improve access to foreign markets a nd to build trust and long-term commercial 
relationships. 
• to contribute towards the facilitation of international co-productions  in the audiovisual markets. 
• to improve transnational distribution  of audiovisual works and enhance the visibility of European 
audiovisual works in the world and vice versa a nd to increase consumer choice for European and 
third country audiences. 
• to reach new audiences and promote film literacy . 
The specific objectives can be broken down to the following more detailed operational objectives / 
actions lines  that refer to the actual deliverables (act ions) of the new initiative (see Annex 11). The 
 
EN - 25 -   EN definition of the specific and operational objectives are largely based on the results of costs-benefits 
analyses carried out by the various ex-post evaluations of MEDIA programmes56 
3.2. Consistency with other European Union policies and other objectives 
The policy objectives are consistent and complement ary with the objectives of other European Union 
policies such as industrial policy, external coope ration policy (including development policy), the 
common commercial policy and the completion of the internal market. 
In the context of the Lisbon strategy the audiovisual  sector is highly relevant and contributes to the 
Lisbon Agenda, namely to boost trai ning, prosperity, growth and jobs in a knowledge-based economy. 
In its conclusions, the European Council of 23 and 24 March 2000 stated that "content industries 
create added value by exploiting and networking Eur opean cultural diversity". This approach was 
confirmed in the conclusions of the Brussels European Council of 20 and 21 March 2003 and by 
conclusions from the Austrian presidency in 2006. Th e initiative is coherent wi th and further develops 
the audiovisual strand of the i2010 initiative –the pol icy umbrella for the EU's information society and 
media policies – in the context of the Lisbon agenda. 
Furthermore, the general policy and the operational obj ectives play an important role in the context of 
the implementation of the UNESCO Convention on the Protection and Promotion of the Diversity of 
Cultural Expressions . This convention emphasises the speci fic and dual (cultural and economic) 
nature of cultural goods and services. 
Community action is consistent with the obligati on placed on the Community by Article 151(4) of the 
EC Treaty to take cultural aspects into account in its action under other provisions of the Treaty, in 
particular in order to respect and to promote the diversity of its cultures.  
The general policy objectives and the specific a nd operational objectives of the action are also 
consistent with the Charter of Fundamental Rights , especially the principle of promoting cultural 
diversity (Article 22). 
4. SECTION 4: POLICY OPTIONS AND IMPACTS  
4.1. Option 1: Business as usual 
The option would cover the continuation of ME DIA 2007, the regional development programmes 
EUROMED Audiovisual II , and EU-ACP Support programme for Cinema and the Audiovisual 
Industry57. 
4.2. Impact of option 1 – "Business as usual" 
The evolution of the problem, all things being equa l, was discussed in section 2.5.1.. In conclusion, 
existing internationalisation efforts in the European audiovisual sector are insufficient and in view of 
the situation evolving on world markets and the tec hnological challenges, the situation for European 
audiovisual companies would deteriorate significantly  over time. All existing programmes have either 
an internal market or a regional (MEDA region or ACP) and not a global focus. 'Business as usual' 
would not entail new costs, but would definitely  have a negative cost: if the opportunities of 
internationalisation are not seized by European co mpanies in the new fast-growing markets (in Asia 
                                                 
56 Except for (1) development support where evaluations conc luded that action lines such as script development 
seminars and pitching events, which are less resource intens ive, could lead to equally good results and have similar 
impacts and for (2) video distribution, which had been heavily criticized by the evaluation report of MEDIA Plus 
but has been retained in MEDIA MUNDUS, because of its major impact in third countries. 
57 See section 2.5.2 above fo r detailed description. 
 
EN - 26 -   EN for example), their revenues will be restricted main ly to the Internal Market, with the limitations 
already described. Therefore this option should not be pursued further. 
4.3. Option 2: Extension of existing instruments 
Under this option, MEDIA 2007, the regional programme EUROMED Audiovisual II , and the EU 
ACP support programme for Cinema and Audiovisual  could be amended in order to attain the 
objectives as described above under section 3.1. 
4.3.1. Extension of Euromed Audiovisual II and the EU – ACP Support Programme for 
Cinema and the Audiovisual Industry 
Euromed Audiovisual II expires at the end of 20 08; the EU-ACP Support Programme for Cinema and 
the Audiovisual Industry is scheduled until 2011. Bo th programmes could be extended and the budgets 
could be increased. For the detailed description of the programmes, see section 2.5.2 above. 
4.3.2. Amendment of the MEDIA 2007 programme 
The following two sub-options could be envisag ed to amend the MEDIA 2007 Programme. For a 
detailed description of MEDIA 2007, see section 2.5.2 above: 
(1) Extending participation and cooperation under Article 8 : On the basis of Article 8 additional 
countries could be integrated in the MEDIA 2007 programme, either as full members or through 
cooperation agreements (see secti on 2.5. above). The programme coul d be opened to the participation 
of professionals from other regions in the world and a specific fund for cooperation under Article 
8(4)58 could be set up. This fund could contain acti on lines specifically devoted to international 
cooperation between European Union professionals  and professionals from third countries having 
concluded a cooperation agreement. Such a fund could for example promote the exchange of 
information (conferences, websites), support joint tr aining initiatives, the use of new technologies and 
the distribution of audiovisual works. 
(2) Opening of MEDIA 2007 to the participation of third countries' professionals,  by opening 
strands to professionals from third countries or a dding specific strands for global cooperation between 
professionals. Accordingly the above defined objectives (see section 3.1) and the actions (see section 4.5 below) would be integrated into the existing MEDIA 2007 programme. 
4.4. Impact of option 2 - Extens ion of existing instruments 
4.4.1. Impact of amending Euromed Audiovisual II and the EU – ACP support programme 
for Cinema and the Audiovisual Industry 
The programmes, EUROMED Audiovisual II  and the EU-ACP programme for Cinema and the 
Audiovisual Industry,  have been successfully operating for some time. 
However, it should be noted that both programmes ar e by their very nature development programmes 
with a specific regional focus (MEDA for Euromed Audiovisual  and ACP-countries for ACP 
Audiovisual ). Thus, the objective of both programmes is to assist partner countries in specific 
geographical zones creating a sustainable future for their cultural heritage through assistance in terms 
of training, development and distribution, and to pr ovide help for the restructuring of these countries’ 
audiovisual markets. Accordingly benefits are c oncentrated on the respective regions. The objectives 
of the initiative currently being discussed focu s on international exchange aiming at the 
competitiveness of the European audiovisual sector  and a global increase of consumer choice and 
                                                 
58 See http://eur-lex.europa.eu/LexUri Serv/site/en/oj/2006/l_327/l_32720061124en00120029.pdf  . 
 
EN - 27 -   EN cultural diversity. In that respect the objectives of the current initiative would not fit into a 
development programme. 
It should be underlined that an extension (in their current form) of EUROMED Audiovisual II  and the 
EU-ACP programme for Cinema and the Audiovisual Industry  would be complementary to the 
objectives of  the current initiative, in that these progr ammes create the structures enabling the 
professionals from these regions to participate as partne rs in any future initiative at an international 
level.  
One of the key recommendations of the working document “Towards a Strategy for the Development 
of Euro-Mediterranean Audiovisual Cooperation59” is the creation of a simple-to-operate co-
production support fund. The Fund would finance th e development (including translation costs), 
production (including post-productio n) and promotion (including assistance for distribution and 
marketing) of works from Mediterranean countries,  including digital products. Professionals from the 
Mediterranean region could subseque ntly be enabled to participate in global, multilateral projects. 
Thus, a new international initiative ME DIA Mundus would be complementary60. 
4.4.2. Impact of amending the MEDIA 2007 Programme 
Sub-option (1): Participation and cooperation under Art. 8  
Opening the MEDIA 2007 programme to further partic ipation of and cooperation with third countries 
as described above would have the following implications: 
"Participation in MEDIA 2007" means (full) involveme nt of the third countries' professionals on the 
same footing as EU professionals, as well as invol vement in the decision making process (comitology) 
through joint committees61 (Article 8 paragraphs 1-3). 
Participation or cooperation with third countries under Article 8 would be on State level and require 
supplementary appropriations and specific arrangements to be agreed upon and would necessitate a 
framework agreement or an international agre ement based on Article 113(5), a Memorandum of 
Understanding, and in the case of participation an  agreement on the financial contribution of each 
country ("entry ticket"). This is an extremely le ngthy procedure (the timeframe for completing this 
procedure could take up to two years for each additional country). 
MEDIA 2007 is listed as GATS 62exempted from the general MFN63. It would therefore be necessary 
to check that each potential partner country has no commitments on audiovisual services in the 
framework of the GATS and that it has scheduled th e necessary exemptions to the MFN rules. This 
would greatly -restrict the scope of the initiative and leave out important countries with emerging 
audiovisual markets. The current MEDIA Intern ational preparatory action has underlined the 
                                                 
59  http://www.euromedaudiovisuel.ne t/general.aspx?treeID=9243&lang=en   
60 There has been some interest from the MEDA region in the Preparatory Action MEDIA International . The 
projects  selected include one project focusing on di stribution and certain MEDA ci nemas are included under the 
cinema networks project).  The financing of these proj ects does not overlap with or duplicate MEDA financing. 
61 As regards management and implem entation of MEDIA 2007, it should be noted that MEDIA 2007  functions on 
the basis of comitology. "Participation in MEDIA 2007" mean s involvement of the third countries' professionals on 
the same footing as EU professionals, as well as involve ment in the decision making process (comitology) through 
joint committees (Article 8 paragraphs 1-3). Even if th ird countries' participation was solely on the basis of 
cooperation they should be allowed to participate as obser vers when decisions concerning them are on the agenda. 
The MEDIA 2007 committee meets between 5 and 6 times a y ear. The participation and cooperation of further 
countries would increase the number of participants/observe rs and meetings. 
62 GATS = General Agreement on Trade in Services (GATS), see 
http://www.wto.org/english/ tratop_e/serv_e /serv_e.htm  . 
63 MFN = Most favoured nation is a status awarded by one nation to another in international trade: the receiving 
nation will be granted all trade advantages (such as low ta riffs) that any other nation also receives and a nation with 
MFN status will not be treated worse than any other nation with MFN status: 
http://www.wto.org/english/ tratop_e/serv_e /serv_e.htm  . 
 
EN - 28 -   EN importance of wide participation (the cinema network action covers 13 countries by itself) and the 
constraints therefore of this option. 
On this basis it is extremely unlikely that a suffi cient number of professionals from third countries to 
create the necessary critical mass in order to achieve the objectives could be reached, since 
professional participation would be  limited to those professionals from the third countries that had 
become members of MEDIA 2007.  
The option is therefore unlikely to contribute to an y of the objectives. For these reasons, this option 
should not be pursued further. 
Sub-option (2):  Opening of MEDIA 2007 to the participation of third countries' professionals  by 
adding the above defined operationa l objectives and the respective stra nds to the legal basis of the 
existing MEDIA 2007 programme. This option is not based on membership by  a country, but third 
country professionals would benefit directly fro m the MEDIA 2007 programme. Therefore, neither 
time consuming and arduous negotiations with othe r governments would be required nor would this 
policy option entail difficulties with GATS regulati ons. As long as the programme were open to all 
third countries' professionals in a non discriminatory way the MFN rule would not be infringed. 
However, the MEDIA programme has been operating fo r 17 years on an internal market basis and has 
high brand equity a high degree of EU-identificati on. Adding international cooperation to its action 
lines would lead to some confusion.  
The present MEDIA 2007  programme includes EU-wide funding for: 
– Training (scriptwriting techniques; economic, financial management; digital technologies); 
– Development (single projects, catalogues, European talent, co-productions, i2i, other financing); 
– Distribution (distributors, sales agents, broa dcasters, cinema exhibitors, VOD, digital); 
– Promotion (market access, festivals, common events, heritage); 
– Horizontal actions making it easier for small and medium sized enterprises to access funding, and 
to encourage the presence of European audiovisual  works on digital platforms, and pilot projects 
embracing new technologies like digital technologies in production and distribution. 
Whilst the option of opening different strands for professionals from third countries, has been 
considered there are few if any activities under the MEDIA 2007 programme where this could be 
successfully achieved in particular in the light  of meeting both the existing objectives under MEDIA 
2007 and the new needs that have been established. Many, like automatic distribution, could not be 
opened on a global scale (for example automatic di stribution support, where necessary data is not 
available, see exhibit 24) and in any event the ope ning up of the strands to non-European professionals 
would change the nature of MEDIA 2007 and impact  negatively on the achievement of the internal 
market objectives, notably in respect of fragmentati on within Europe and the horizontal priority of 
addressing imbalances between European markets.  This means that the option would entail the 
addition of new strands under the existing progra mme alongside the current activities, but with an 
international focus. 
The actions to be implemented un der the current initiative are eval uated below under sections 4 and 5. 
In section 4.4. and 5.6. an analysis is carried out as  to whether it is more cost effective to integrate 
them into the MEDIA 2007 programme or whether to create a new programme.  
4.4.3. Conclusion 
It can be concluded that neither an extension of the EUROMED Audiovisual II  and the EU-ACP 
programme for Cinema and the Audiovisual Industry  nor an opening of the MEDIA 2007 programme 
to further countries can reach the objectives define d in section 3. The possibility of opening MEDIA 
2007 (in the form of additional action lines) to coop eration with professionals from third countries is 
discussed further in section 5. 
 
EN - 29 -   EN 4.5. Option 3: Creation of a new instrument  
The key problem for the sector is the limited circul ation of audiovisual works. Community financing is 
designed to provide a leverage effect, which coul d not be achieved by legislative measures for the 
audiovisual sector64. Legislative instruments were not retained in this Impact Assessment because they 
were considered inappropriate in relation to the objective of reinforcing the competitiveness of the 
audiovisual sector.. The action lines would be availa ble for all professionals from Europe and third 
countries independent from the origin of the project  and would not discriminate against any region. 
Therefore subsidies would be in line with the principle of the Most Favoured Nation rule and WTO compatible. 
In order to respond to the problems set out in section 2, two general policy objectives (global 
objectives) were defined in section 3 for which in  turn four major specific objectives have been 
identified.  
For each of these four specific objectives, a series of cumulative operational objectives /actions were 
developed based on (1) contributions of stakeholde rs, (2) evaluations of previous MEDIA programmes 
and (3) experience gained from implementing the current MEDIA 2007 programme. 
Following the principle of mutual benefit prof essionals from the European Union and from third 
countries would have to jointly propose and impl ement projects under the proposed actions. Therefore 
potential applicants for all proposed actions ar e relevant professionals from Europe and third 
countries. Funding would be availa ble for consortia only, and unde r two basic premises: (1) any 
group/consortium which submits a project needs to be  headed by a company with head office in the 
EU/a Member of the programme; (2) any group/co nsortium should include at least one audiovisual 
company/organisation which has its he ad office in a third country.  
This section on policy option 3 is t hus sub-divided into sub-sections for each specific objective. For 
each specific objective, the operational objectives/acti ons are first described, then their impact is 
assessed against a set of economic and social/cultural criteria as well as a (stable) environmental criterion, in addition to a qualitative verbal assessmen t of each specific objective, the result of this 
assessment is also summed up in a table (exhibits 11 to 17). Moreover, two alternative scenarios were 
developed for the specific objectives 2 and 3; for each of these respective scenarios the operational 
objectives/actions are first described, then th ey are assessed/compared (text and exhibits). 
Values attributed to the various operational objectives /actions for each of the economic, social/cultural 
and environmental criteria in exhibits 11, 13, 14,16 and 17 range from "---" to "+++" and were 
established on the basis of experience and expertise from the implementation of the MEDIA 
programme in the MEDIA unit. 
--- Extremely negative impact 
-- Very negative impact 
- Negative impact  
0 No impact at all, ne ither negative nor positive 
+ Positive impact and positive contribution to achieving the specific objective 
++ Very positive impact and clear positive contribution to achieving the specific objective 
+++ Extremely positive and decisive impact and extremely clear positive contribution to achieving the 
specific objective  
 
                                                 
64 Therefore, no legislative measures are planned. Howe ver, the recently adopted Audiovisual Me dia Services 
Directive includes a new definition of European audiovisual works, complementary to the aims of this initiative. 
 
EN - 30 -   EN 4.5.1. Specific Objective 1 – information exchange and market intelligence 
These operational objectives/action lines would implement the first specific objective. Market 
knowledge and networks are crucial to create awar eness about market opportunities in order to access 
foreign markets, to remedy the under-financing of th e audiovisual industry and to improve circulation 
of audiovisual works. 
• Operational Objective / Action Line 1.1. - Building up of Websites and Databases: Action would 
aim at collecting and disseminating structured information about European and third country 
audiovisual markets. This information could be diss eminated in the form of an Internet platform 
using a common structure and predefined guidelines (s imilar to the concept (but not the content) of 
EraWatch65 or Cineeuropa66 ). Furthermore, it could be useful to build a database of interested 
professionals and training institutions in Europe a nd third countries available on the Internet. There 
is no intention to duplicate any existing structur es; on the contrary, the necessary structures do not 
generally exist.  
• Operational Objective / Action Line 1.2. - Network of audiovisual contact points : Action would 
aim at installing a network of contact points in va rious regions of the world in order to monitor 
audiovisual markets in terms of market opportunities, distribution venues and possible barriers. Members of the network would act as primary information points for European audiovisual 
professionals seeking to access third country ma rkets, and vice versa and they could help 
audiovisual companies to look for partners in the re spective regions (e.g. with a view to future co-
production or distribution activities).  
• Operational Objective / Action Line 1.3. - Certification of training establishments
67: Action could 
aim at inviting European and third country pr ofessional training establishments to apply for 
certification from the European Commission, based on a set of well defined criteria. 
• Operational Objective / Action Line 1.4. - Initial training68: Action would aim at supporting 
activities such as mutual exchange between in itial training establishments. For example film 
schools could arrange for joint courses or scholarship s could be given to students to study abroad. 
• Operational Objective / Action Line 1.5. - Continuous training : Action would support continuous 
training projects for European and third country professionals. Potential topics should relate to the 
problems identified under section 2 and could include: Improving economic and financial 
management related to cross-border activities; launching marketing campaigns on international 
markets; organising distribution in other territories; pitching programmes69 with third country 
broadcasters; promoting European best practic es in third countries; reaching audiences with 
Internet technologies70; using new technologies in order to improve production and post-production 
workflows; dealing with new distribution platfo rms, such as VOD, IPTV, Web TV. Projects could 
                                                 
65 http://cordis.europa.eu/erawatch/   
66 http://cineuropa.org/  , Cineuropa  is given as an example for a certain type  of webpage, it however does not relate to 
international cooperation, wh ere no such website exists.  
67  The idea of certification of training establishments wa s raised in interviews conduc ted by the consultants (see 
points 6.2.1 and 6.2.2 of the Technopolis Impact assessment study, "accreditation").As it can be seen in exhibit 10 
on  page 18 of the draft extended impact assessment, the au thor DG does not believe that there is an added value in 
such certification. The process would be resource intensive and since the market is relatively limited, stakeholders 
can easily informally obtain information about the quality of training measures 
68 Training under MEDIA supports the creation of pan-Europ ean training networks to help professionals in the 
audiovisual industry enhance their competences in the international market. Separate action lines support initial 
training initiatives for students with  no experience in the sector, and continuous training for experienced 
professionals of the audiovisual industry. 
69 Pitching sessions offer producers the opportunity to "pitch", i. e. present / sell their projec ts to a panel of potential 
buyers such as TV channels.  
70 eMarketing strategies, Web 2.0 or new and innovative delivery mechanisms  such as IPTV, Web TV or VOD. 
 
EN - 31 -   EN relate to an opening of existing (MEDIA 2007 s upported) training projects to professionals from 
third countries or they could consis t in setting up new training activities. 
• Operational Objective / Action Line 1.6. –Market access and Events : Under this action line access 
instruments such as an umbrella stand for key European Union/international film markets, 
reimbursement of travel costs and fees could be included.  
Impact of Specific Objective 1:  
Information about third countries’ audiovisual industr ies in Europe is scarce, as is information about 
European audiovisual industries in third countries. However, provision of information is crucial to 
create awareness about market opportunities, facilitate  market access and foster intercultural dialogue. 
In addition, the market is changing rapidly with  the advent of new technologies and stakeholders, 
making it crucial to collect relevant, updated info rmation. The impact of information dissemination 
and exchange tend to be of a long-term and sustaina ble nature and is likely to continue even if the 
public intervention ceases. Once a basic threshold of  awareness and know-how has been reached, a 
long-term change in behaviour of audiovisual professionals is likely to take place over time. 
Training is an effective tool for communication, contributes to networking and leads to an 
improvement of skills needed to access internationa l markets. Evaluations of the previous MEDIA 
programmes71 show that the skills acquired by participants  in training are long lasting. The proportion 
of firms hiring MEDIA trained persons also reve als that these skills ar e being appreciated and 
disseminated throughout the sector. The effects of sc hemes that, in particular through scholarships, 
help encourage meetings and exchanges of professi onals are lasting, even though results may occur 
several years after the intervention.  
Regarding a possible impact on the first gene ral policy objective (global objective), namely 
competitiveness, information provision would lead to  increased knowledge about audiovisual markets, 
and would reduce the cost for companies of obtaining that information on their own. This is important 
since the European audiovisual industry consists ma inly of small and medium sized enterprises, with 
limited strategic and financial resources at their disposal. Information exchange facilitates market 
access by increasing opportunities and reducing cost. A ccess to foreign markets would open additional 
financial sources and would help to remedy the under-financing of the audiovisual industry. The 
creation of sustainable networks lo wers transaction costs between different markets. Since the sector is 
dominated by small and medium sized enterprises w ithout significant financial capacity, there is an 
additional added value and a specific need to support their participation in the major industry events. 
Regarding a possible impact on the second genera l policy objective (global objective), namely 
consumer choice and cultural diversity, effective di ssemination of information as well as mechanisms 
to ensure continuous market in telligence can lead to greater networking between professionals and 
therefore contribute to intercultural dial ogue and enhance intercultural learning. 
It was however found that certification of training in stitution would not significantly contribute to any 
of the objectives. Costs (established on the b asis of other audit systems, for example EMAS72 figure of 
approximately 50 000 Euro) are high and institutions need to be regularly monitored. It is difficult to 
see an added value, in particular in view of the hi gh costs and the fact that there are possibilities to 
obtain information via other, less costly, means. Therefore this option was not pursued further. 
 
                                                 
71 http://ec.europa.eu/information_society/me dia/overview/past_programmes/index_en.htm  . 
72  http://ec.europa.eu/envi ronment/emas/index_en.htm   
 
EN - 32 -   EN Exhibit 11: Potential impact of Operational Objective / Action Line 1 
Impact Description of impact Websites and 
Databases  Contact 
points Certification of 
training 
establishment Initial training Continuous training Market access 
Increased availability of information on structure 
and functioning of markets +++ +++ 0 ++ +++ + 
Enhanced know-how on international markets  ++ ++ 0 ++ +++ ++ 
Increased awareness of market opportunities for 
European audiovisual professionals in third countries and vice versa +++ +++ 0 + +++ +++ Economic 
Reduced transaction cost related to the 
ascertaining of relevant information +++ +++ 0 + ++ + 
Increased networking between European and 
third country professionals ++ ++ 0 ++ +++ +++ Social/ 
Cultural 
Enhanced dialogue about audiovisual cultures 0 + 0 + + + 
Environ-
mental No impact  on CO 2-Emissions from increased 
volume of travel 0 + 0 + + ++ 
Short term 
effect  ++ ++ 0 + ++ +++ 
Long term 
effect  ++ ++ + ++ +++ ++ 
 
EN 33   EN 4.5.2. Specific Objective 2 - Facilitati on of international co-productions 
These operational objectives are intended to implem ent the second specific objective. A generally 
positive role is played by co-productions with rega rd to market access as shown by recently published 
data by the European Audiovisual Observatory73: 54% of Latin American films and 42% of African 
films released on the European market were majority co-productions74 with Europe. If minority co-
productions are also taken into acc ount, the proportions rise to 64% a nd 74% respectively. In addition, 
an analysis of the findings in terms of the numbe r of admissions clearly suggests that films co-
produced between third countries and European Union countries are more successful than those that 
have not been co-produced75. This action line therefore contributes to  the circulation of films. It also 
addresses the problem of under-financing, in that offi cial co-productions have access to the financing 
systems of all "participating countries”, see section 2.5.2. 
There are two phases when it comes to setting up co -productions: The development (action line 2.1.) 
and the production phases (action line 2.2.). 
Operational Objective / Action Line 2.1. - Supporti ng the development stage of co-productions:  
Two different, alternative scenarios can be cons idered in respect of the development of co-
productions.  
Scenario 1:  
An important number of consulted stakeholders opted strongly in favour of a specific development 
fund for co-productions.  
• A specific fund for  the development of projects could be set up : Support would aim at supporting 
the development phase of audiovisual projects, i.e.  to prepare for financing, casting and finalising 
the script etc. Such support should only be possible if at this stage two producers (one European, one from a third country) are already involved. 
• Furthermore, support would be awarded for the organisation of co-production markets, partner 
search events (pitching):  Support would aim at bringing together possible partners at co-
production events and markets (for script writers, directors and producers).  
Scenario 2:  
• Instead of setting up a development fund, support could be awarded for Script development 
training:  Support would aim at script development trai ning and at the development of high quality 
scripts for co-productions. 
•  Support under this scenario w ould also be granted for the organisation of co-production markets, 
partner search events (pitching)  
Operational Objective / Action Line 2.2. - Supporting the funding of co-productions: 
For the funding of co-productions two alternative scenarios could also be envisaged. Under one 
scenario the Commission would finance co-producti ons whilst under the second scenario existing co-
                                                 
73 The place of third country film and audiovisual works in European markets, Report updated for the conference 
‘Cinema, Europe, the World’, organized by the CNC during the French Presidency of the Council of the European 
Union, Paris 7-8 July 2008 http://www.obs.coe.int/online_publicati on/reports/thirdcountry_av_works.pdf.en  . 
74 Majority co-productions are productions where European  partners have the lead (in general above 50%).  
75 Co-productions take place in differe nt contexts: Story driven/artistic co -productions” are motivated by the 
content/story line (for example a character is from a country different from the others, some scenes have to be shot 
in a particular part of the world etc.). "Financial co-p roduction” activities are driven by the necessity to access 
funds from different sources in order to be able to finan ce the film. Frequently, this le ads to using facilities or 
actors from different countries whether or not there is a requirement in terms of the content of the film.  
 
EN 34   EN production funds would be supplem ented and financial institutions  would be supported for this 
activity. 
Scenario 1:  
• Setting-up co-production fund for feature films:  Such a fund could support co-productions 
between European Union professionals and professionals from third countries. 
• Setting up a co-production fund for animation films:  Several stakeholders pointed out the 
particular necessity of such a f und for co-financing animation films. 
• Setting up a co-production fund for documentary films:  Several stakeholders pointed out the 
particular necessity of such a fund for co-financing documentary films. 
• Gap financing of co-production budget76: Gap financing refers to supporting financing the 
difference between the production budget for the film and the amount of presales or other funding 
that a bank would traditionally use as collateral fo r "production loans" by using an estimate of the 
value of the unsold rights to the film77. 
Scenario 2:  
• Alternatively, the Commission could Supplement existing co-production funds:  Under section 
2.5.2 and in Annex 8 reference is made to sev eral co-production funds. These existing funds could 
be supplemented. 
• Facilitate access to commercial financing:  Support could be provided to  financial institutions in 
order to facilitate access to fi nancing from banks and other financia l institutions by subsidizing for 
example part of the cost of guarantees, insura nce, completion  bonds or financing costs. 
Exhibit 12: Alternative instruments for delivering operational objective 2 
 
 
 
Impact of Specific Objective 2 
As regards the first general policy objective (gl obal objective), namely increased competitiveness, co-
productions have access to additional financing instruments (see section 2.5.2), they circulate better 
and can therefore reach a broader audience78. Co-productions can play a very important role in 
boosting film production in countries with no or ve ry weak national financial support measures. A 
                                                 
76 For details regarding film fina nce, see Appendix B of the imp act assessment study (Technopolis). 
77 For example, if the production budget is 2.5 million Eu ro and 2 million Euro of the budget is already covered by 
presales, investor funds, public funds or other collateral, the remain ing 0.5 million Euro that is not covered by any 
collateral, other than the future potential sales on the film, is considered the "gap." 
78  http://www.obs.coe.int/o nline_publicati on/expert/krakow_report.pdf.en   
 
EN 35   EN good example is co-productions supported under the Ibermedia79 fund which have contributed to the 
emergence of production talent on the Latin American market. 
The main contribution of co-productions to cultura l diversity, i.e. the second general policy objective 
(global objective) defined , is the impact on the art and language of film. Professionals from different 
regions of the world cooperate on co-productions , often with different methods (for example 
photography), visions of the world and working habits. 
Thus, facilitating co-productions addresses the pr oblems listed under section 2 and contributes to 
increasing the competitiveness of the audiovisual sector and cultural diversity. 
Under the first scenario there would be very high ad ditional administrative costs (17 extra staff needed 
for the agency to run the devel opment and co-production funds, see Anne x 10b and extra costs of 3.11 
million Euro). 
Impact of Operational Objective / Action Line  2.1. - Supporting the development stage of 
co-productions: Scenario 1 and 2 
An important number of stakeholders opted stro ngly in favour of support for the development 
stage of co-productions. However, experience from previous MEDIA programmes show that 
support to development of projects in terms of administrative overhead co sts is particularly 
resource intensive (see Annexes 10a and 10b). Script development seminars and pitching 
events, which are less resource in tensive, can lead to equally good results and have a similar 
impact80.(For details, see section 5.4 ). 
Exhibit 13: Potential impact of Operational Objective / Action Line 2.1 
Area of impact Description of impact a) Script 
development b) Pitching c) Development 
Fund 
Enhanced know-how  +++ ++ 0 
Better knowledge of 
international markets + ++ 0 
Accessing additional 
production funds Indirect + + ++ 
Increasing circulation and 
distribution Indirect+ + + 
Reaching a wider audience Indirect+ + + Economic 
More consumer choice Indirect+ + + 
Increased networking between 
European and third country professionals ++ ++ + 
Better films +++ + 0 
Enhanced dialogue about 
audiovisual cultures 0 0 + Social/cultural 
Culturally more diverse offer 
of films Indirect+ Indirect+ + 
Environmental No impact on CO2-Emissions 
from increased volume of 
travel - -- - 
Short term effect  + ++ ++ 
Long term effect  ++ ++ Indirect 
                                                 
79 http://www.programaibermedia.com/   
80 See action lines 2.1.a and 2.1.b above. 
 
EN 36   EN Impacts of Operational Objective / Action Li ne 2.2. - Supporting the funding of co-
productions Scenario 1 and 2 
Extensive discussions were held with professi onals and representatives from Member States on 
whether to finance co-productions. The outcome was not  clear cut and controversial. Stakeholders had 
strong opinions in favour of co -production funding, stating that th ere was a considerable necessity 
because existing funds were insufficien t and co-productions contribute gr eatly to the artistic value of a 
film and cultural diversity. On the other hand, nati onal authorities invoked the principle of subsidiarity 
and some stakeholders raised the difficulties su rrounding the administration of co-production funds. 
• Setting-up a fully fledged co-production fund:  Reservations regarding the principle of subsidiarity 
relate in particular to the setting up of a fully fledged co-production fund. As described above co-
productions in certain cases can benefit from the participating states’ support systems. However, 
most professionals considered state funding and international funds that are available largely 
insufficient. Administration costs are comparatively high.  
• Setting up a co-production fund for animation films:  Several professionals expressed strong 
support for such funding because Europe could bene fit from third countries’ advanced experiences, 
e.g. Asia. Administration costs are comparatively high. 
• Setting up a co-production fund for documentary films: Several professionals expressed 
strong support for such funding b ecause such co-productions were ve ry important in terms of story-
telling and contribute to cultural diversity. Administration costs are comparatively high. 
• Gap financing of co-production budget:  Because of “market failure”, there would definitely be a 
need for such funding. Administration costs are comparatively high. 
• Supplement existing co-production funds:  In line with the subsidiarity principle and to avoid the 
cumbersome administration of a fund, existing co-production funds could be supplemented in view 
of the positive impact of co-productions. 
• Facilitate access to commercial financing : In view of the ongoing problems of small and medium 
sized enterprises to access commercial financing, this option would have a positive impact on the 
competitiveness of the sector and encourage fina ncing institutions to expand their activities81.  
Exhibit 14: Potential impact of Operational Objective / Action Line 2.2  
Impact Description of impact Co-
production 
fund features Co-
production 
fund 
animation  Co-
production 
fund 
documentary Gap 
financing Supplement 
existing 
funds Access 
to 
finance 
Enhanced know-how  0 0 0 0 0 0 
Better knowledge of 
international markets 0 0 0 0 0 0 
Accessing additional 
production funds +++ +++ +++ +++ +++ +++ 
Increasing circulation and distribution + + + + + ++ 
Reaching a wider audience ++ ++ ++ ++ ++ ++ Economic 
 
More consumer choice ++ ++ ++ ++ ++ ++ 
Increased networking 
between European and third 
country professionals + + + + + + Social 
/cultural 
Better films 0 0 0 0 0 0 
                                                 
81 Under MEDIA 2007 “i2i” is a similar small s cale support mechanism in favour of producers. 
 
EN 37   EN Impact Description of impact Co-
production 
fund features Co-
production 
fund 
animation  Co-
production 
fund 
documentary Gap 
financing Supplement 
existing 
funds Access 
to 
finance 
Enhanced dialogue about 
audiovisual cultures + + + + + + 
Culturally more diverse 
offer of films ++ ++ ++ ++ ++ ++ 
Environ-
mental No impact on CO 2-
Emissions from increased 
volume of travel - - - - - - 
Short term 
effect  ++ ++ ++ ++ ++ ++ 
Long term 
effect  + ++ ++ + + + 
4.5.3. Specific Objective 3 - Distribution and circulation of audiovisual works 
These operational objectives would implement the third specific objective and primarily address the 
circulation of audiovisual works (with an impact on revenues and financing of the audiovisual sector). 
The aim would be to attain a market share of 7%  for EU works in third countries and vice versa over 
the three years. 
For the distribution of audiovisual works, two alte rnative scenarios have been  considered, first the 
European model of distinct activities (right-hol ders, sales agents, and distributors) and secondly 
creating realistic partnerships across the value chain. 
Scenario 1:  
• Operational Objective / Action Line 3.2. – Support to sales agents:  Sales agents could be 
supported to prospect new markets, attend big festivals/markets and increase their promotion 
investments for European audiovisual works in third countries and vice versa. 
• Operational Objective / Action Line 3.3. - Automatic distribution support82: To give structural 
support to the distribution of European audiovisu al works in third countries and vice versa, 
automatic funding (based on prior distribution of  similar audiovisual works) could be made 
available to European and third country distribut ors (in partnerships) for the acquisition and the 
print and advertising costs (prints, dubbing and subtitling, promotion and public relations 
activities) of those audiovisual works. Inspired by  the automatic scheme developed in MEDIA, the 
amount of potential support should be calculated from the admissions or box office receipts from European audiovisual works in third countries and vice versa. (Data is not easily available; therefore a different mechanism would need to be developed). 
• Operational Objective / Action Line 3.4. - Selective distribution support
83: Selective support to 
distributors could be made available to partnerships  of European and third country distributors for 
the print and advertising costs (prints, dubbing and subtitling, promotion and public relations 
activities) of European or third country audi ovisual works. These partnerships could be 
coordinated by sales agents. 
 
                                                 
82 Under MEDIA 2007, "automatic support" is  granted on the basis of the number of tickets sold in a territory for a 
non-national European film in order to encourage circ ulation of European audiovisual works among different 
countries participating in the prog ramme. Member States nominate an authority to "certify" tickets sold. 
83  Under MEDIA 2007, "selective support" covers specifi c promotion and distribution costs such as dubbing  and 
subtitling and is granted to permanent groupings of Europe an companies distributing a film from another European 
country in order to encourage circulation of European au diovisual works among different countries participating in 
the programme.  
 
EN 38   EN Scenario 2:  
• Operational Objective / Action Line 3.1. - Support to right-holders, sales agents and 
distributors: As the key players in international distribution, right-holders, sales agents, and 
distributors could be supported in order to encourage international sales and export of European 
audiovisual works (and vice versa) by stimulati ng the conclusion of agreements between right-
holders, sales agents, and distributors of EU countries and those of third countries to ensure the distribution (in cinemas, on TV, VOD, video…) of their respective audiovisual works on the territory/territories of their partner(s).  
These action lines would be valid for both scenarios: 
• Operational Objective / Action Line 3.5. - Cinema networks: Financial support would be 
provided to cinema networks with screens in Eu rope and in third countries that programme a 
significant number of European audiovisual works and vice versa. 
• Operational Objective / Action Line 3.6. - Su pport to broadcasters and digital platforms: In view 
of the technological developments and the wide  audience reached by TV broadcasting, support 
should be made available to ensure that European  works are shown on TV in third countries and 
vice versa. Similarly niche, thematic, IPTV, We b TV, VOD platforms etc. should be encouraged 
to show European and third countries' programme s according to a set of predefined criteria.  
Exhibit 15: Alternative instruments for delivering operational objective 3 
 
Impact of Specific Objective 3 
Scenario 1:  
Under MEDIA 2007 support is awarded to sales agen ts and distributors, through several automatic 
and/or selective schemes. Given the differences be tween sales agents' and distributors activities and 
the specificity of their role in the circulation of European audiovisual works, three action lines devoted 
to the distributors/sales agents' activities ar e in place under MEDIA 2007: selective support for 
distributors, automatic support for distributors and automatic support for sales agents. These mechanisms achieve good results in the context of th e internal market. However, for an international 
cooperation programme and in view of the objectives, the approach does not appear to be promising. 
Firstly, the system of automatic distribution support  is not transferable to global markets, because 
certain data on which the support under MEDIA 2007 is  calculated, is missing or difficult to obtain. 
Secondly, the implementation of these three suppor t mechanisms based on partnerships (groupings) 
does not really reflect the realities of the sector. (A European distributor never gets into contact with a foreign distributor and has no interest in having a commercial relationship with him. This situation 
also characterises the relationships between Eur opean and foreign sales agents. ). For these two 
reasons it is not likely, that the actions (support to  sales agents, automatic and selective distribution 
support) presented under this scenario would contribute sufficiently to achieving the objective of 7% market share for EU works in third coun tries and vice versa over the three years. 
To alternatively award support to individual applican ts would mean that fina ncing would be granted 
directly for professionals in third countries. This however is not in line with the logic of the programme (mutual benefit) and would lead to  additional risks (see section 5.5.1. below).  
 
 
 
EN 39   EN Scenario 2:  
Distribution is key to bringing productions to the market. Given the characteristics of international 
distribution/circulation of audiovisual works around the world and the respect of the mutual benefit 
principle, the fostering of agreements gathering distributors, sales agents and rights holders of the 
European Union and third countries is the only way to increase distribution and thus to achieve the 
objective of 7% market share for EU works in third countries and vice versa over the three years Given the growing importance of new technologies as well as the number of screens in many third countries, it is also crucial to define distribution not  only in the traditional venue of cinema exhibition, 
festivals or TV broadcasting, but also to incl ude new delivery mechanisms such as DVD, VOD, IPTV, 
Web TV
84, mobile TV etc. this approach takes account of the different roles played by professionals 
inside and outside Europe. Regarding the circula tion strand in both scenarios, in general, improved 
distribution significantly contributes to increased circ ulation. The impact can be expected to be 
twofold, responding to both general policy objectiv es, firstly increased competitiveness and secondly, 
cultural diversity and consumer choice85. 
• Any increase in circulation obviously depends on the financial resources of the programme 
invested in distribution activities. 
• The actions proposed will help to reduce the ri sks and costs of distribution. The fragmented 
structure of the European distribution system  as well as the reduced financial capabilities of 
distributors hamper film distribution, leading to time constraints and increasing both risk and cost of distribution. 
Exhibit 16: Potential impact of Specific Objective / Action Line 3 
Impact Description of 
impact Partnerships 
between sales 
agents 
distributors 
and right-
holders  Sales 
agents Automatic 
distribution 
support Selective 
distributi
on 
support Cinema 
networks Broadcas
ters/IPTV
/VOD 
Increase 
distribution +++ + ++ ++ +++ ++ 
Increase circulation Indirect++ In direct++ Indirect++ Indirect++ +++ +++ 
Reaching a wider 
audience Indirect++ Indirect+ In direct+ Indirect+ +++ +++ Economic 
More consumer 
choice Indirect++ Indirect++ In direct++ Indirect+ +++ +++ 
Culturally more 
diverse offer of 
films +++ ++ +++ +++ +++ +++ Social 
/cultural 
Enhanced dialogue 
on audiovisual 
cultures 0 0 0 0 ++ ++ 
Environ-
ment No impact on CO2-
Emissions from 
increased volume 
of travel - - - - - 0 
Short term 
effect  +++ + ++ ++ ++ ++ 
Long term 
effect  +++ + + + ++ ++ 
                                                 
84 Web TV is a computerized system that enables viewing TV on the Internet. 
85 Experience with MEDIA Plus has shown that coverage has been extensive: During the period of the programme, 
one in three European films circulating outside of its  national borders received direct support from MEDIA Plus. 
That ratio increased towards the end of the programme, see 
http://ec.europa.eu/information_society/me dia/overview/evaluation/reports/index_en.htm  . 
 
EN 40   EN 4.5.4. Specific Objective 4 - Reach new audiences and promote film literacy 
These operational objectives would implement the fourth specific objective, i.e. reaching new 
audiences and promoting film literacy. It is closely linked to the issues raised about viewing habits and 
the need to raise awareness and visibility for Europe an and foreign audiovisual works. It is important 
in terms of the (long term) development of  the circulation of audiovisual works. 
• Operational Objective / Action Line 4.1. - Support to festivals: Support would cover programming 
of European and third country audiovisual works and film education activities.  
• Operational Objective / Action Line 4.2. - Support to special events: Support would cover events 
like ex-Cinedays86, and Picture Europe87, to raise awareness and create "market space" for the 
promotion of European audiovisual works and vice versa. Support could also be awarded in favour 
of "European film screenings" organised in th ird countries (for example in delegations).  
• Operational Objective / Action Line 4.3. - Netw orks for targeting young audiences including 
education activities: A focus on young audiences, including film education activities in cinemas, 
could have a lasting impact on viewing habits. Th is point was frequently raised by stakeholders. 
• Operational Objective / Action Line 4.3. - Sup port for TV programmes dedicated to young 
audiences: Special support to children's programmes. A focus on young audiences could have a 
sustainable impact on the viewing habits. Childre n's films were highlighted as an area where 
consumer choice was extremely limited.  
Impact of Specific Objective 4 
This specific objective is of particular importance in  order to support and to give a sustainable, long-
term effect to Community action. It was demonstr ated above (see section 2.3), that a change in 
viewing habits would be im portant in terms of a long term effect  for the intervention. There would in 
addition be an impact on competitiveness in the l ong run resulting from behavioural change, whereas 
the impact on cultural diversity and consumer choice would be immediately visible. Also, having films 
selected in festivals is a good starting point for later sales and marketing.  
Exhibit 17: Potential impact of Specific Objective/ Action Line 4 
Area of impact Description of impact Festivals Special events Young 
Network Young TV 
programmes 
Increasing circulation ++ ++ ++ ++ 
Reaching a wider 
audience ++ ++ ++ +++ Economic 
More consumer choice + + ++ +++ 
Educating audiences in 
terms of cultural 
diversity ++ ++ +++ +++ 
Enhanced dialogue 
about audiovisual 
cultures ++ ++ ++ ++ Social/cultural 
Culturally more diverse 
offer of films ++ ++ +++ +++ 
Environmental No impact on CO2-
Emissions from 
increased volume of 
travel - - 0 0 
Short term effect  + + + + 
Long term effect  ++ ++ +++ +++ 
                                                 
86 Cinedays = Organised for the first time in 2002, CINE DAYS consisted of a Europe wide programme of major 
European films in cinemas, TV and f ilm libraries, with special showings organised, particul arly for schools. 
87 http://www.pictureurope.e u/2008/en/flashintro_PE.php  . 
 
EN 41   EN 5. SECTION 5: COMPARISON OF OPERATIONAL OBJECTIVES / ACTION LINES / OPTIONS  
A comparison of scenarios/ options is carried out in  two steps. First, the above described operational 
objectives/action lines will be assessed regarding their cost-effectiveness, i.e. expenditure (costs) and 
expected outcomes (effects). A budget allocation is presented first, taking into account the different 
scenarios. On the basis of the scenarios, the assumptions regardi ng the cost effectiveness of the 
different operational objectives/action lines is comp ared in section 5.2., taking into account the 
impacts (section 4). Subsequently, after identifying which action lines are most effective and should be 
pursued (sections 5.4 and 5.5), the two possible policy options "extending MEDIA 2007" or "creating 
a new programme MEDIA Mundus" will be assessed to establish which would be most effective for 
implementation (section 5.6). 
5.1.  Cost implications of the programme over 3 years 
5.1.1. Scenario 1 
Exhibit 18 does not include the administrative costs which are laid out in full in Annex 10 b. 
Exhibit 18: Cost implications of a new progra mme, 2011 to 2013 in million Euro for Scenario 1  
MEDIA Mundus (commitment appropriations) 2011 2012 2013 TOTAL 
Specific Objective 1: Informa tion exchange and market 
intelligence    
1) Building up Websites and Databases 2 1,2 0,8 4 
2) Network of contact points 1,5 1,5 1,5 4,5 
4) Initial training 2 3 3,5 8,5 
5) Continuous training  6 8 10 24 
6) Market access mechanisms 8 8 8 24 
Specific Objective 2: Fac ilitating intern ational co-
production activities    
1) Development     
Development fund for co-productions   4 4 4 12 
Co-production markets 2 3 3 8 
 2) Co-production     
a) Co-production fund for feature films 2 2,5 2,5 7 
b) Co-production fund for animation films 0,5 0,7 0,8 2 
c) Co-production fund for documentary films 0,5 0,7 0,8 2 
c) Gap financing 0,5 1 1,5 3 
Specific Objective 3: Distribution  and circulation support     
1) Support to sales agents 3 4 5 12 
2) Automatic distribution support 9 10 12 31 
3) Selective distribution support 13 14 15 42 
4) Cinema network 7 7,5 7,5 22 
5) Support to broadcasters and digital platforms 8 8 8,5 24,5 
Specific Objective 4 : Reach new audiences and promote 
film literacy    
1) Festivals 4 5 5 14 
2) Special events 4 3 2 9 
3) Networks for targeting young audiences including 
education activities2 2 2,5 6,5 
4) Support for TV programmes dedicated to young audiences 2 2,5 3 7,5 
 
EN 42   EN Total (in million Euro) 81 89,6 96,9 267,5 
5.1.2. Scenario 2 
Exhibit 19 shows the cost implications of the specific and operational objectives for the second 
scenario, reallocating the budget of the scenario 1. Ex hibit 19 does not include the administrative costs 
which are laid out in full in Annex 10 a. 
Exhibit 19: Cost implications of a new progra mme, 2011 to 2013 in million Euro for Scenario 2  
MEDIA Mundus (commitment appropriations) 2011 2012 2013 TOTAL 
Specific Objective 1: Inform ation exchange and market 
ii    
1) Building up Websites and Databases 21 ,20 ,8 4
2) Network of contact points 1,51 ,51 ,5 4 ,5
4) Initial training 2 3 3.5 8.5
5) Continuous training  6 8 10 24
6) Market access mechanisms 8 8 8 24
Specific Objective 2: Fac ilitating international co-
ii i i    
 1) Development  
a) Script development 333  9
b) Co-production markets/partner search (pitching) 3 4 4 11
 2) Co-production     
a) Supplement existing co-production funds 3 4 5 12
b) Access to finance  011  2
Specific Objective 3: Dist ribution and circulation     
1) Support to partnerships of right holders, sales agents and 
di ib27 29 29 85 
2) Cinema network 7 7,5 7,5 22 
3) Support to broadcasters and digital platforms 8 8 8,5 24,5 
Specific Objective 4 : Reach new audiences and promote 
fi i    
1) Festivals 4 5 5 14
2) Special events 432  9
3) Networks for targeting young audiences including 
di i i i22 2 ,5 6 ,5
4) Support for TV programmes dedicated to young 
di22 ,53  7 ,5
Total (in million Euro) 82,5 90,7 94,3 267,5 
5.1.3. Scenario 3 
In order to take current economic crisis into account  , scenario 3 is based on a smaller budget than that 
of scenarios 1 and 2. Such an option aims at ensu ring continuity following the preparatory action and 
at paving the way for a larger programme under the new financial perspectives. Exhibit 20 shows the 
cost implications of the specific and operational objectives for scenario 3. Exhibit 20 does not include 
the administrative costs, which are laid out in full in Annex 10 a.  
Exhibit 20: Cost implications of a new progra mme, 2011 to 2013 in million Euro for Scenario 3  
MEDIA Mundus (commitment appropriations) 2011 2012 2013 TOTAL 
Specific Objective 1: Inform ation exchange and market 
ii    
 
EN 43   EN 1) Continuous training  0,90 ,90 ,9 2 ,7
Specific Objective 2: Compet itiveness and distribution     
 1) Co-production markets / partner search 0,60 ,60 ,6 1 ,8
2) Support to partnerships of right holders, sales agents and 
di ib1,1 1,1 1,1 3,3 
Specific Objective 3 : Circulation     
1) Cinema network 0,90 ,90 ,9 2 ,7
2) Support to broadcasters and digital platforms 0,70 ,70 ,7 2 ,1
3) Audience support 0,30 ,30 ,3 0 ,9
Total (in million Euro) 4,5 4,5 4,5 13,5 
 
 
EN 44   EN  
5.2. Assumptions on the cost effectiveness and the European a dded value regarding 
the different operational objectives; Scenarios 1 and 2  
The following exhibits present the assumptions rega rding unit costs and outputs and assess the added 
value of each proposed activity in relation to the proposed budget. 
5.2.1. Specific objective 1: Information exchange  and market intelligence – Scenarios 1 
and 2 
Exhibit 21: Outputs and unit costs for specific objective 1, Scenarios 1 and 2, 2011 to 2013  
Assumption Assessment 
1) Building up 
Websites and 
Databases 
Based on discussions 
with stakeholders and 
global market analyses, the needs in 
the context of MEDIA 
Mundus would consist 
in ca. 6 websites and 
databases covering geographic zones, and 
in these zones certain 
film genres and topics related to right holders 
and market structures. 
The average cost per unit over three years 
amounts to 200 000 
Euro. The unit costs have been determined on the basis of previous experiences with the 
establishment of different databases and websites, for example under the MEDIA 
2007 programme: The cost range from 85.000 Euro for a database aimed at European professionals (Cinando) to 375.000 Euro for a website dedicated to information on the 
European industry (Cineuropa) and 235 000 Euro for the integration of databases 
(such as the Pro2Film).  An average of 200 .000 Euro per unit can be considered as 
low. 
The costs will be co-financed at 80%; such a high intervention guarantees an 
impartial, for the user cost-free service at high level. The envisaged output of 6 
websites/databases is a minimum for global geographical (Latin America, Asia, 
MEDA, North America, India, ACP and "Neighbourhood policy area") and content 
coverage. The costs for the establishment of websites and databases are decreasing 
over time. Once the websites and databases have been established only the costs for 
updating will be necessary.  
There is an added value, in that no such comprehensive websites for international 
markets exist. In the public consultation professionals stressed the necessity of such 
an information tool. Synergies could be expected for professionals on a European as well as on a global level. The websites will partly be supplemented with information 
collected under other actions of MEDIA Mundus. 
2) Network of 
contact points In this 
context  payments to 
the MEDIA Desks & 
Antennae 
 (co financed with 
10.000 Euro per unit) 
for providing 
information to 
stakeholders are taken into account. In 
parallel 6 contact 
points (unit costs of 183 333 Euro) would 
be established in third 
countries. The network of 43 MEDIA Desks & Antennae in the EU and 6 contact points in third 
countries (for example Latin  America, Asia, India, ME DA, ACP and "Neighbourhood 
policy area) would provide stakeholders with all relevant information regarding the 
respective markets and the trustworthiness of potential partners. The costs are based 
on the experience with the MEDIA Desks. Community support would amount to annually 10.000 Euro per desk/antenna and should cover the additional costs for 
providing the stakeholders with informa tion. The MEDIA Desks and antennas are 
established bodies already co-financed at 50%  by Member States; they already form a 
network and have a sector knowledge from which the professionals can benefit. 
Therefore similar results could not be obtained at a lower price.  
In parallel 6 contact points would be established in third countries, the costs per unit 
were calculated at 183 333 Euro, including costs for personnel and infrastructure. , in 
regions with emerging or strong audiovisual markets. The envisaged output of 6 contact points is a minimum for global geographical coverage (Latin America, Asia, 
MEDA, North America, India, ACP and "Neighbourhood policy area"). 
This would be complementary to actions by  the Member States and actions under the 
MEDIA 2007 programme (i.e. the network of MEDIA Desks). It should be noted that 
MEDIA Desks & Antennae are attached to national structures; therefore there is 
complementarity with national support scheme s as well as with European audiovisual 
support. It would be more difficult, and much more expensive to establish such a 
network at the level of Member States, in  particular for smaller Member States. 
Hence, there is an European added value.
 
 
EN 45   EN Assumption Assessment 
3) Support for initial 
training  
150 individual 
scholarships (12 000 
Euro 24 000 Euro for postgraduates) and 50 
other initial training 
measures like exchange and 
cooperation between 
film schools on more specific topics (with 
costs of 106.000 Euro 
per unit). On this basis, the average unit 
costs amount to 
40.000 Euro. In order to attract the most talented students, the programme has to offer competitive 
scholarships. A comparison with similar international scholarship programmes in the field confirms these figures
88. Although the programme could benefit from having a 
system to pick students according to their educational background and study 
destination, the administrative costs of such a system (and the risk of fraud) would be likely to out-weigh its benefits and would not be cost-effective. The output of 150 
scholarships over a three year period, covering Europe and third countries, is a 
minimum output for the creation of global networks and a sustainable effect.  
For the initial training measures, unit cost s are based on expe rience with MEDIA 
2007 and the ex post evaluation of MEDIA Training (2001-2006). The EU financial 
contribution would be between 40% and 80% of the eligible costs, depending on the geographical origin of the applicants. The output of 50 other initial training measures 
is necessary in order to reach the critical ma ss of participants and to create sustainable 
networks and the necessary transfer of know how for future cooperation between professionals and projects.  
There is European added value in the creation of global networks, which can generate 
important synergies between professionals.  This is particularly important for 
professionals from smaller Member States.   
4) Support for continuous training  
140 trainings over 3 
years, with an average 
unit cost of 170.000 
Euro (including scholarships). Some 
(between 20% and 30 
%) of the supported measures will consist 
in an extension of 
training measures supported under 
MEDIA 2007. Unit costs are based on experience with MEDIA 2007 (Euro 267.000 per unit) and the 
first year of the Preparatory Action MEDIA International (out of the 11 supported 
projects, two were extensions of continuous training projects supported under MEDIA 
2007. The average costs of these extensions  were 35.000 Euro, the costs of the non-
extension projects amounting on average to 123.000 Euro.) 
A minimum investment is required to set up the training, rent the premises, pay the 
trainers etc. Support would amount to 50% 80% depending on the locations for the 
training and the geographic origin of the partners and participants. This rule was 
already successfully applied in the first year of th e Preparatory Action MEDIA 
International.  
The number of trainings would be increasing over time; in order to give the sector the 
time necessary to develop the relevant training measures and to address the relevant partners and professionals. The total output of 140 trainings over 3 years  is necessary 
in order to create a critical mass of potential partners and to attract professionals 
specialising in the various international aspects of production, distribution and circulation. The number of 140 outputs was calculated on the basis of the feedback in 
the context of the public consultation and the first year of the Preparatory action 
MEDIA International. Further to that experience from MEDIA 2007 regarding the diversity of efficient training modules was taken into account. 
A comparable global approach  does not exist in national support systems, However 
awareness and knowledge of global markets is a precondition for players to make the 
most of their potential and to improve global circulation of works. In order to achieve 
these objectives only a pan –European approach can ensure  added value.  
5) Facilitation of 
market access 
Under the market 
access mechanisms, 
support is awarded for the participation in 
festivals and markets. 
Eligible costs cover (umbrella) stands and 
travel costs. The costs 
per unit amount to Unit costs were determined on the basis of MEDIA 2007 experience and experts' 
opinions (e.g. evaluation committee of Lot 2 of the Preparatory Action MEDIA International).   
Under MEDIA 2007 the costs for a (average) stand vary between 300.000 and 
600.000 Euro; the price for market access mechanisms varies between 50.000 and 
450.000 Euro. The costs calculated here are below the average MEDIA 2007-costs 
because in some of the most important ma rkets (like Cannes and Berlin) MEDIA is 
already supporting stands. A MEDIA Mundus contribution would cover between 50% and 80%, depending on the relevance of the festival/market and the geographical 
origin of the respective partners.  
The number of supported projects (output of 85 actions) would enable the programme 
                                                 
88  See also Impact assessmen t  ERASMUS Mundus, page 43 
 http://ec.europa.eu/governance/ impact/docs/ia_2007/sec_2007_0949_en.pdf  
 
EN 46   EN Assumption Assessment 
280.000 Euro. Total 
output of 85 actions to cover the most important international film festivals and markets. Similar results 
could not be achieved at lower costs or with fewer outputs. 
Umbrella stands would enable European professionals to participate in (very 
expensive) international markets. This is in particular relevant for professionals from 
small Member States, who cannot afford an individual presence on all big 
international markets. The complementarity and European added value is high since 
these actions would give European professionals the opportunity to join forces and to 
be more visible at major events. 
 
 
5.2.2. Specific objective 2: Facili tate international co-produc tion activities - Scenario 1 
Exhibit 22: Outputs and unit costs for specific objective 2, Scenario 1;  2011 to 2013 
Assumption Assessment 
 1) Development  
a) Development fund 
for co-productions  
300 outputs 
(supported film-projects), 40.000 Euro 
each Unit costs under the MEDIA 2007 programme  amount to 80.000 Euro maximum. 
Under MEDIA Mundus costs would be 50% lo wer because the costs of international 
co-productions are on average lower than the costs for European films
89.  
The development of approximately 100 co-production projects per year would be 
supported. Not all films financed under development enter into production, but in any 
case this will result in a selection of "q uality" films and the learning effect for 
producers of films not going into production is also considerable.  
Development of international co-productions is only to a very limited extent 
supported by some Member States (some of the international co-production funds integrate development support, see Annex 8), and if so with a national focus. 
Therefore there is a European added value. However, the administration of such a 
fund is very resource intensive, because a lot of documents need to be read and evaluated by different experts in various languages. It can therefore not be considered 
to be sufficiently cost-effective. 
b) Organisation of co-production 
markets and partner search events 
(pitching)  
110.000 Euro per 
event. Total output of 
73 events Under the Preparatory Action MEDIA Interna tional costs for similar actions were on 
average 110.000 Euro.  
Financing would amount to 50-80%, depending on the nature of the event, for 
example whether it is taking place in the c ontext of a festival (50% only), and also 
depending on the geographical origin of the partners and the country where the event 
would take place. 
The number of events would increase in the second and third year of the programme. 
73 events over a three year period is a minimum number in order to ensure  the 
selection of high quality projects (i.e. not a quantitative approach) and to cover all geographical zones of interest. 
The action is complementary to actions in Member States, which mostly have a 
national focus. Here, Europe will be presented at pitching events in all its cultural 
diversity and can offer access to a large mark et, and this will guarantee the interest of 
strategically important international investor s. The added value for the participants is 
the possibility to meet various investors from strategic markets, willing to invest.  
 
                                                 
89  For example, the average cost of French co-productions  involving (a) partner(s) from (a) third country (ies) amount 
to 1,98 million Euro, against 5,4 million Euro for other French films.   
 
EN 47   EN Assumption Assessment 
 2) Co-production  
a) Co-production 
fund for feature films  
Unit costs: 50.000 
Euro, outputs over three years: 140 films Unit costs were calculated on the basis of funds awarded by existing international co- 
production funds (see Annex 8), and are comparatively low. The output number of 
140 films over the three year period of the programme was established following 
discussions with and needs assessment of existing international co-production funds. Support would amount to a maximum of 20% of the production costs.  
Several Member States consider production as funding falling into their exclusive 
competence and being subject to the princi ple of subsidiarity. Furthermore, the 
administration of such a fund would be very resource intensive and complicated, i.e. 
with regard to the contracts to be concluded with the different financiers, the script 
which would need to be read entirely and evaluated in any language, control of receipts/costs afterwards fr om different territories ar ound the world and finally 
exchange rate fluctuations. Therefore, there are doubts as to the cost-effectiveness of a 
co-production fund for feature films. 
b) Co-production fund for animation films  
Unit costs: 60.000 
Euro, output over three years: 33 films Unit costs were calculated on the basis of reports from the animation industry. They 
very low compared to the averag e budget of animation films.   
The output of 33 films over a three year period was established following market 
investigations. Financial support would amount to a maximum of 25% of the 
production costs.  
Member States do not run such international funds focused on animation films. 
Animation films have an important potential for export and circulate well. They are 
costly and therefore produced mainly by fe w countries. The existence of such a fund 
could increase the production of animat ion films and improve competitiveness. 
However, several Member States consider that production funding falls into their 
exclusive competence and is su bject to the principle of subsidiarity (see above).  
c) Co-production 
fund for 
documentary films : 
40.000 Euro unit costs with 50 outputs (films) 
over three years Unit costs were calculated on the basis of e xpert opinions. They are low compared to 
the average budget of documentary films (for example around 0,6 million Euro for a 
French documentary film).  
The output of 50 films over a three year period is low as regards the current level of 
production and the strong interest in documentary films (thematic channels for 
example) and their educational and cultural impact. It reflects the choice to focus on 
high quality and ambitious projects. Support would amount to a maximum of 30% of the production costs.  
Member States do not run such international funds focused on documentary films. 
Documentary films have an important poten tial for export, in particular on TV, and 
circulate well. However, several Member Stat es consider that production funding falls 
into their exclusive competence and is subj ect to the principle of subsidiarity (see 
above).  
d) Gap financing of production costs  
30 000 Euro per unit, 
100 outputs (films) In order to incite banks to provide gap financing to co-productions, the EU would 
cover part of the loans and interest costs. The average costs would amount to 30.000 Euro. Over the three years of the programme, 100 international co-productions could 
benefit from this tool.  
However, the Commission, not being a financial institution itself, could not 
administer such a fund. It could only awar d part of the financing costs (see i2i under 
MEDIA 2007) to banks. Experience from MEDIA 2007 shows that the administration of such funding would be particularly resource intensive. In the case of international 
cooperation it would be further complicated, in particular regarding the evaluation of 
proposals (scripts to be read in all languages), contracts with different banks and ex-post control. This would significantly counterbalance the leverage effect. It can be 
concluded that gap financing of production costs is not sufficiently cost-effective. 
5.2.3.  Specific Objective 2: Facilitate inter national co-production ac tivities - Scenario 2 
Exhibit 23: Outputs and unit costs for specifi c objective 2, Scenario 2; 2011 to 2013 
 
EN 48   EN Assumption Assessment 
 1) Development  
a) Script 
development training  
amounts to 113.000 
Euro per unit. Total 
output of 70. Unit costs are based on experience with  MEDIA 2007 and the Preparatory Action 
MEDIA International. Script development trainings already supported by MEDIA receive contributions ranging from 50.000 to 300.000 Euro, the proposed cost per unit 
of 113.000 Euro is therefore reasonable. Sc ript development training can to a large 
part take place interactively via the Internet. Th ese unit costs are therefore lower than 
the costs calculated for continuo us training (see exhibit 18). 
An average output of 23 trainings per year is appropriate to develop co-productions, 
considering the failure rate of film  projects at the development stage. 
Co-financing would amount to 50 - 80% of the eligible costs, depending on the 
geographical origin of the partners and the country where the event is going to take 
place. 
Most script development trainings offered by Member States require that the plot 
takes place on their respective territory. Such  restrictions are a constraint for the 
development of artistic international co-production and the subsequent circulation of films. Under this action, the training would have a focus on "international script 
development", i.e. international co-productions and how to reach international 
audiences by adapting the script; a field which is not covered by Member States. The training would be complementary to actions pursued by Member States and would in 
the follow-up enable professionals to obtain financing for their projects from diverse 
national and international sources. Thus, there is a clear European added value. 
b) Organisation of co-production 
markets and partner 
search events 
(pitching)  is financed 
up to 110.000 Euro 
per event. Total output of 100 events Under the Preparatory Action MEDIA Interna tional costs for similar actions were on 
average 110.000 Euro.  
Financing would amount to 50-80%, depending on the nature of the event, for 
example whether it is taking place in the c ontext of a festival (50% only), and also 
depending on the geographical origin of the partners and the country where the event 
would take place. 
The number of events would increase in the second and third year of the programme. 
The output of 100 events over a three year period is a minimum number in order to 
ensure the selection of high quality projects (i.e. not a quantitative approach) and to 
cover all geographical zones and genres (feature, animation and documentary films) . (Under the first scenario a smaller numbe r of outputs was proposed, because the 
setting-up of a development fund is considered to have a similar effect in part). 
The action is complementary to actions in Member States, which mostly have a 
national focus. Here, Europe will be presented at pitching events in all its cultural 
diversity and can offer access to a large mark et, and this will guarantee the interest of 
strategically important international investor s. The added value for the participants is 
the possibility to meet various investors fr om strategic markets, willing to invest. 
 2) Co-production  
a) For supplementing 
existing co-production funds   
Unit costs of 500.000 
Euro. 24 outputs would go over the 
three years period of 
the programme to ca.8 funds The unit costs were calculated on the basis of the budget of the existing public 
international film funds (see Annex 8). By supporting approximately eight funds (with 24 outputs over the three years period) the action would obtain global coverage, both 
in terms of European and non-European professionals. 500.000 Euro is a small 
amount, and is based on the average budget and intervention level of these funds, investing in productions with a low budget (on average less than 1 million Euro per 
film).Thus, even small contributions (for instance 50 000 Euro per film) can make an 
important difference.  The funds would be administered by existing funds in the Member States. In comparison to the first scenario, under which the Commission 
would run the fund, the supplementing of existing co-production funds is much more 
cost effective. The budget for this action would increase over the three year period. 
Most of the funds are fighting for their budget and their exis tence, for instance 
because they do not have an  important economic effect in  the Member States, but are 
significantly contributing to global cultural diversity. Therefore Community action 
 
EN 49   EN Assumption Assessment 
would be complementary to action by Member States and there would be important 
European added value in terms of the implementation of the UNESCO convention on 
cultural diversity and international exchange. 
b) Access to finance : 
Unit costs: 500.000 
Euro, 4 outputs This action would for administrative reas ons start in the second year of the 
programme. The costs of 500.000 Euro per unit, (4 outputs over 2 years) are very low 
for the start of this action. Financial inst itutions would be encouraged to facilitate 
access to finance; for example award guara ntees to banks for international co-
productions; guarantee funds would have a very important leverage effect90.  
The selected bodies will have an obligation to reinvest the funding. The majority of Member States do not have national or international funds, 
facilitating access to finance. Among European professionals there is a strong demand 
and need for more commercial finance and therefore there is an important European added value when encouraging banks to invest in international film production. 
5.2.4. Specific objective 3: Distribution an d circulation support - Scenario 1 
Exhibit 24: Outputs and unit costs for specifi c objective 3, Scenario 1;  2011 to 2013  
Assumption Assessment 
1) Support to sales 
agents  average of 50 
000 Euro per project. 
Support would be 
awarded for MG, P&P and P&A costs. 240 
outputs over the three 
years period 
 Support would be awarded for groupings of sales agents assembling rights for 
different territories and films. Unit costs comprise a maximum of 10.000 Euro per 
film and territory and up to a maximum of 250.000 Euro per grouping, consisting of 
at least 2 sales agents covering at least 10  territories and at least 2 films. Unit costs 
were calculated on the basis of MEDIA 2007 projects. Support could finance up to 50% of the eligible costs, depending on the territory (Costs would cover: MG = 
minimum guarantee; P&P= prints and production; P&A = promotion and advertising). 
Given the complexity of releasing films in various regions of the world, these are low 
costs. Over the three year period 240 consortia (minimum 480 films) would be 
supported. Fewer outputs would not lead to a sustainable effect on the market to reach 
the critical mass for distribution.  
The logic of this approach was inspired by the MEDIA 2007 programme and achieves 
good results in the context of the internal market. However, for an international cooperation programme the implementation based on partnerships (groupings) does 
not reflect the realities of the sector, and is therefore unlikely to sufficiently contribute 
to increasing the market share to 7% and thus any European value added is 
questionable. 
2) Automatic distribution support   
unit cost of 70.000 
Euro per film and 442 films supported over 
the three year period Support would be awarded to a grouping of distributors from at least two territories 
and with at least 2 films. The exact amount of potential support is based on the 
receipts from the films, origin and the coun tries of distribution.  Unit costs per film 
would not exceed 70.000 Euro (a figure much lower than the funding potentially awarded under MEDIA 2007- ca. 300 000 Euro per film- this difference because of 
the lower ticket prices in third countries). Th e distributor would be obliged to reinvest 
the financial support in co-production or distribution of audiovisual works. The output is very low, because – to start the gene ration system - only films having had a 
minimum amount of admissions would be eligible. This barrier is particularly high, 
also compared to the automatic support under MEDIA 2007.  
Support could finance up to 50% of the eligible costs (depending on the territory, 
comprising MG = minimum guarantee; P&P= prints and production; P&A = promotion and advertising). 
                                                 
90   See for example IFCIC: http://www.ifcic.fr/infos/communi ques-bilan-de-l-annee-2007.html 
 
EN 50   EN Assumption Assessment 
 The logic of this approach was inspired by the MEDIA 2007 programme and 
achieves good results in the context of the internal market. However, for an 
international cooperation programme it would be difficult to obtain the necessary data 
to run an automatic support system. Furthermore an European distributor does not usually have contact with a foreign distributor and has no interest in having 
commercial relationships with him. Thus, it is questionable whether such an action 
could lead to a significant increase in market share and contribute to  European value added . 
3) Selective distribution support  
140.000 Euro with 
300 outputs Support would be awarded for groupings of distributors assembling rights for 
different territories and audiovisual works. The unit costs comprise a maximum of 
20.000 Euro per film and territory and up to a maximum of 300.000 Euro per 
grouping, consisting of at least 2 distributors and at least 5 films. Unit costs were 
based on MEDIA 2007 experience. Support could finance up to 50% of the eligible 
costs, depending on the territory (Costs would cover: MG = minimum guarantee; P&P= prints and production; P&A = promotion and advertising).  
Given the complexity of releasing films in various regions of the world, these are low 
costs. Over the three year period 300 consortia (minimum 600 films) would be supported.  
The logic of this approach was inspired by the MEDIA 2007 programme and achieves 
good results in the context of the internal market. However, in the current context of an international programme, this action does not appear to be promising in terms of 
increasing the market share of  7% market share for EU works in third countries and 
vice versa over the three years. 
4) Cinema network : 
The unit costs (per network) amount to 
1.47 million Euro. 15 
outputs over the three years period (5 
networks). The unit costs are based on the experience from MEDIA 2007 and in particular from 
Lot 3 (cinema networks) from the first year of the Prepar atory Action MEDIA 
International (700 000 Euro for putting in place one network). Discussions with 
experts confirmed the desirability to support new and additional networks, so that the 
different segments of the exhibition market  and different audiences can be reached. 
Considering the number of cinemas participating in such networks and the direct 
effect on the value chain, th e unit costs are very low. Comp ared with the only existing 
cinema network on an European level, which receives 7 million Euro from MEDIA 
for 1500 screens, this action will be able to  support an average of  300 screens in each 
network. The support would encourage cinemas to show a certain rate of European and third countries' films, by subsidising 50% of the exhibition costs.   
Member States are not running such networks  on an European or international level. 
Therefore there is an important added valu e in that films are exhibited beyond their 
national borders. 
5) Support to broadcasters and 
digital platforms : 
The average unit costs amount to 390.000 
Euro for the support of 
63 projects associating European and non-
European broadcasters 
and VOD platforms over three years. Unit costs are based on the MEDIA 2007 experience with the VOD support scheme 
and on discussions with experts. 
Considering the rigidity of the broadcasting market (high competition between 
programmes, risk adversity in particular relating to non national and non US- productions), groupings of broadcasters could tackle these problems and obtain a 
price lower than the average market price.  This goes hand in hand with the new 
Audiovisual Media Service Directive
91, which qualifies co-productions as European 
works. 
 For VOD platforms, the average unit cost  is lower than the MEDIA-supported VOD 
platforms (average unit cost of 411.000 Euro). 
The financial contribution would cover 50% of the costs so as to ensure the 
commercial viability and visibility of the selected projects, which is a key element in 
a very competitive environment. 
Member States are not financing similar projects and, apart from national and US 
                                                 
91   See footnote 2  
 
EN 51   EN Assumption Assessment 
productions, films are not widely distributed. Therefore there is an important added 
value in terms of consumer choice.  
 
5.2.5.  Specific objective 3: Distribution and circulation s upport - Scenario 2 
Exhibit 25: Outputs and unit costs for specifi c objective 3, Scenario 2; 2011 to 2013 
Assumption Assessment 
1) Support to 
partnerships of right-holders, sales 
agents and 
distributors
 160.000 
Euro per project, 540 
outputs 
 Support is awarded to groupings of distributors, sales agents/ right-holders assembling 
rights for audiovisual works in different te rritories and on different  formats/platforms. 
Unit costs comprise a maximum of 30.000 Euro per film and territory and up to a 
maximum of 550.000 Euro per grouping, consisting of at least 2 distributors and 2 
sales agents/right-holders covering at least 10 territories (= country) and at least 5 
audiovisual works. Unit costs were calculated on the basis of MEDIA 2007.  
Support could finance up to 50% of the eligible costs (depending on the territory, 
comprising MG = minimum guarantee; P&P= prints and production; P&A = 
promotion and advertising). These are the lowest possible costs in view of the 
complexity of releasing audiovisual works in various regions of the world. Over the three year period 540 consortia (minimum 2700 audiovisual works) should be 
supported. As per the MEDIA evaluations, fewer outputs would not lead to a 
sustainable effect on the mark et to reach the critical mass for distribution. This action 
is complementary to MEDIA 2007; and export strategies exist only on a unilateral 
level in Member States.  
The European added value lies in the mutuality of the approach, to the benefit of 
visibility and diversity of films and consumer choice: By providing concentrated 
support to groupings of distributors, sales agents/ right-holders, this action is expected 
to considerably contribute to the objective of  7% market share for EU works in third 
countries and vice versa over the three years.  
4) Cinema network : 
The unit costs (per 
network) amount to 
1.47 million Euro. 15 outputs over the three 
years period (5 
networks). The unit costs are based on the experience from MEDIA 2007 and in particular from 
Lot 3 (cinema networks) from the first year of the Prepar atory Action MEDIA 
International (700 000 Euro for putting in place one network). Discussions with 
experts confirmed the desirability to support new and additional networks, so that the different segments of the ex hibition market and different audiences can be reached. 
Hence, the envisaged output of 5 networks per year. 
Considering the number of cinemas participating in such networks and the direct 
effect on the value chain, th e unit costs are very low. Comp ared with the only existing 
cinema network on an European level, which receives 7 million Euro from MEDIA 
for 1500 screens, this action will be able to  support an average of  300 screens in each 
network. The support would encourage cinemas to show a certain rate of European 
and third countries' films, by subsidising 50% of the exhibition costs.   
Member States are not running such networks on European or international level. 
Therefore there is an important added valu e in that films are exhibited beyond their 
national borders, significantly contributi ng to global cultural diversity. Therefore 
there would be important European added value in terms of the implementation of the 
UNESCO convention on cultural diversity. 
5) Support to broadcasters and 
digital platforms : 
The average unit costs Unit cost is based on the MEDIA 2007 experience with the VOD support scheme and 
on discussions with experts. 
Considering the rigidity of the broadcasting market (high competition between 
programmes, risk adversity in particular relating to non national and non US- 
 
EN 52   EN Assumption Assessment 
amount to 390.000 
Euro for the support of 
63 projects associating 
European and non-European broadcasters 
and VOD platforms 
over three years. productions), groupings of broadcasters could tackle these problems and obtain a 
price lower than the average market price.  This goes hand in hand with the new 
Audiovisual Media Service Directive
92, which qualifies co-productions as European 
works. 
For VOD platforms, the aver age unit cost is lower than the MEDIA-supported VOD 
platforms (average unit cost of 411.000 Euro). 
The envisaged output of 63 projects would be split between broadcasters and VOD 
platforms reflecting the new technological challenges and opportunities to 
internationally distribute content. 
The financial contribution would cover 50% of the costs so as to ensure the 
commercial viability and visibility of the selected projects, which is a key element in 
a very competitive environment. 
Member States are not financing similar projects and, apart from national and US 
productions, films are not widely distributed. Therefore there is an important added 
value in terms of consumer choice.  
 
Under both these scenarios almost 50% of the budget would be devoted to specific objective 3. Firstly, 
in relation to the problems identified and to the general objectives pursued by the programme MEDIA 
Mundus (circulation/diversity), it is reasonable to c oncentrate a large part of the intervention on the 
activities' segment dedicated to international circula tion and distribution of audiovisual works. Such a 
strategy is justified by the results of the ex-pos t evaluations of the MEDIA programmes and the results 
of the public consultation. The MEDIA evaluations show the excellent cost-effectiveness ratio of the 
interventions on this segment and their short-term impact on the  circulation of non-national European 
works inside the European Union (2/3 of the non na tional European films circulating in Europe have 
benefited from the distribution support of MEDIA 2007). In line with the objectives of MEDIA Mundus, all actions contributing significantly to thei r achievement have been included: In addition to 
the distributors, the sales agents, the right-holders a nd the cinemas, they include schemes for television 
networks and for new distribution supports (VOD plat form). In view of the above, the proportion of 
the MEDIA Mundus budget devoted to distribution/ci rculation is moderate (see also section 5.6 and 
5.8 below).
 
5.2.6. Specific objective 4: Reach new audiences and promote film literacy 
Exhibit 26: Outputs and unit costs for specific objective 4, Scenarios 1 and 2; 2011 to 2013 
Assumption Assessment 
1) Festivals  are 
supported with 
average unit costs of 50.000 Euro. 280 
outputs Costs were calculated on the basis of  experience with MEDIA 2007, where 100 
festivals receive an average of 35 000 Euro yearly. To focus the su pport in the context 
of MEDIA Mundus on the most important festivals throughout the world, only 90 festivals would receive support (280 outputs over three years). An average amount of 
50 000 Euro would be allocated in order to incite festivals to participate. 
Circulation of audiovisual works in the context of festivals is one important condition 
to give a platform to audiovisual works and make them interesting for international 
distribution. The costs calculated are the lo west costs possible in order to give an 
incentive to present a culturally diverse offer of films. Eligible festivals would have to show at least 25% of European films in third countries and vice versa. Support would 
cover up to 50% of the eligible costs, i.e. those related to showing the films (approx. 
8-10% of the festival costs) and support would not exceed 80.000 Euro where several festivals introduce a joint request, and 35.000 Euro if the application is made by an 
European intermediary.  
                                                 
92   See footnote 2  
 
EN 53   EN Assumption Assessment 
The financing of festivals has an important leverage effect. There is a European added 
value, in that festivals with a diverse programme in Europe contribute to cultural 
diversity and consumer choice and outside the Union the visibility of European films 
would be strengthened.   
2) Special events  
Support is planned for 
30 promotional events over a three year 
period with an average 
unit cost of 300.000 Euro. Support would cover events like ex-Cinedays
93, and Picture Europe94, to raise 
awareness and create "market space" for the promotion of European films and vice 
versa. Events would for example include "European film festivals" organised by a subcontractor for at least 10 EU delegations (or other public bodies) in third countries. 
The eligible costs would include the buying of the rights and the transport of the 
prints. The organiser of the festival would need to provide the facilities and the infrastructure.  
These actions would enable spectators to s ee a cultural diverse sample of films. The 
costs are the lowest possible and have been ca lculated on the basis of past experience. 
Such festivals will not generate income, the promotional aspect is at the very fore. 
The output of 10 promotional events per year is a minimum to allow a number of 
focused events via different media and in different geographic zones. 
Currently it is very difficult to organise  such screenings, because for each film 
individually rights and prints need to be obtained. To have a subcontractor organising all this is of important added value.   
3) Network for targeting young 
audiences including 
education activities . 
Over the three year 
period 30 such 
networks and partnerships would be 
financed at a unit cost 
of 220.000 Euro. The costs and the number of outputs (30 over the three year period) are based on 
experience with cinema networks, festival s and the organisation of events in the 
context of various generations of MEDIA programmes. Feature films, children’s 
documentaries, short films and animations would be presented to young audiences, in each case combined with an educational pr ogramme. Eligible costs would cover 60% 
of the exhibition costs (including acquisition of rights and dubbing of the films) and 
60-80% of the educational programme and of transport costs for children, depending on the location. With a lower co financing rate it would be difficult to find the 
respective partners with a similar international focus and investment capacity.  
In Europe children would see films from third countries and in third countries 
European films would be screened. Similar activities exist at national level but not 
promoting international cinema. The long term impact on viewing habits and the early 
education to cultural diversity, as well as the exhibition of films beyond their national 
borders are of added value and justify the intervention. Therefore there would be 
important European added value in terms of the long-term implementation of the 
UNESCO convention on cultural diversity. 
4) Support for TV programmes 
dedicated to young 
audiences . 
Over the three year 
period this action 
would co-finance the dubbing of 260 films 
to be broadcast, with a 
unit cost of 30.000 Euro. Costs were calculated on the basis of experience with distribution support schemes 
and a study on dubbing and subtitling
95.  
The ceiling of the MEDIA 2007 contribution for dubbing is fixed at 40 000 Euro, an 
average of 30 000 Euro would encourage quality dubbing. Support under MEDIA Mundus would amount to 50% of the dubbing costs.  
Broadcasters need an incentive for broadcasting more international programmes for 
children. The envisaged output is 260 films, a lower intervention rate  would not be a 
sufficient incentive and fewer outputs would not provide for sufficient global media 
coverage.  
There is an added value in that European broadcasters would show more third country 
films and broadcasters from third countries more European films. This cannot be 
achieved at Member State level and cont ributes to the implementation of the 
UNESCO convention on cultural diversity. 
                                                 
93 Cinedays = Organised for the first time in 2002, CINE DAYS consisted of a Europe wide programme of major 
European films in cinemas, TV and f ilm libraries, with special showings organised, particul arly for schools. 
94 http://www.pictureurope.e u/2008/en/flashintro_PE.php  . 
95  http://ec.europa.eu/information_society/media/overview/evaluation/studies/index_en.htm   
 
EN 54   EN 5.3. Assumptions on the cost effectiveness and the European a dded value regarding 
the different operational ob jectives; Scenario 3  
The following exhibits present the assumptions rega rding unit costs and outputs and assess the added 
value of each proposed activity in relation to the proposed budget. 
5.3.1. Specific objective 1: Information exchange  and market intelligence – Scenario 3 
Exhibit 27: Outputs and unit costs for specific objective 1, Scenario 3, 2011 to 2013 
Assumption Assessment 
1) Support for 
continuous training  
45 trainings over 3 
years, with an average unit cost of 60.000 
Euro (including 
scholarships) . Some 
(between 20% and 30 
%) of the supported 
measures will consist in an extension of 
training measures 
supported under 
MEDIA 2007. Unit costs are based on the first year of the Preparatory Action MEDIA International 
(out of the 11 supported projects, two were extensions of continuous training projects 
supported under MEDIA 2007. The average costs of these extensions were 35.000 
Euro, the costs of the non-extension project s amounting on average to 123.000 Euro.) 
A minimum investment is required to set up the training, rent the premises, pay the 
trainers etc. Support would amount to 50% 80% depending on the locations for the 
training and the geographic origin of the partners and participants. This rule was already successfully applied in the first year of th e Preparatory Action MEDIA 
International.  
The total output of 45 trainings over 3 years was calculated on the basis of the first 
year of the Preparatory action MEDIA International (11 continuous training projects 
have been supported with a global community contribution of 0.78 Mio Euro.  
A comparable global approach  does not exist in national support systems, However 
awareness and knowledge of global markets is a precondition for players to make the 
most of their potential and to improve global circulation of works. In order to achieve these objectives only a pan –European approach can ensure  added value.  
  
5.3.2. Specific objective 2: Competitiveness and distribution - Scenario 3 
Exhibit 28: Outputs and unit costs for specific objective 2, Scenario 3;  2011 to 2013 
Assumption Assessment 
1) Organisation of 
co-production markets and partner 
search events 
(pitching)  
110.000 Euro per 
event. Total output of 
16 events Under the Preparatory Action MEDIA Interna tional costs for similar actions were on 
average 110.000 Euro.  
Financing would amount to 50-80%, depending on the nature of the event, for 
example whether it is taking place in the c ontext of a festival (50% only), and also 
depending on the geographical origin of the partners and the country where the event would take place. 
The number of events would decrease in the second and third year of the programme. 
In regard with the first year of the prep aratory action MEDIA Inte rnational, 16 events 
over a three year period is a minimum number in order to ensure  the selection of high 
quality projects (i.e. not a quantitative approach) and to cover all geographical zones 
of interest. 
The action is complementary to actions in Member States, which mostly have a 
national focus. Here, Europe will be presented at pitching events in all its cultural diversity and can offer access to a large mark et, and this will guarantee the interest of 
strategically important international investor s. The added value for the participants is 
the possibility to meet various investors from strategic markets, willing to invest.  
 
2) Support to 
partnerships of Support is awarded to groupings of distributors, sales agents/ right-holders assembling 
rights for audiovisual works in different te rritories and on different  formats/platforms. 
 
EN 55   EN Assumption Assessment 
right-holders, sales 
agents and 
distributors  160.000 
Euro per project, 21 
outputs 
 Unit costs comprise a maximum of 30.000 Euro per film and territory and up to a 
maximum of 550.000 Euro per grouping, consisting of at least 2 distributors and 2 
sales agents/right-holders covering at least 10 territories (= country) and at least 5 
audiovisual works. Unit costs were calculated on the basis of MEDIA 2007.  
Support could finance up to 50% of the eligible costs (depending on the territory, 
comprising MG = minimum guarantee; P&P= prints and production; P&A = 
promotion and advertising). These are the lowest possible costs in view of the 
complexity of releasing audiovisual works in various regions of the world. Over the 
three year period 21 consortia (minimum 100 audiovisual works) should be supported. 
As per the MEDIA evaluations, fewer outputs  would not lead to a sustainable effect 
on the market to reach the critical mass for distribution. This action is complementary 
to MEDIA 2007; and export strategies exist only on a unilateral level in Member 
States.  
The European added value lies in the mutuality of the approach, to the benefit of 
visibility and diversity of films and consumer choice: By providing concentrated 
support to groupings of distributors, sales agents/ right-holders, this action is expected 
to contribute to the objective of 7% market share for EU works in third countries and 
vice versa over the three years.  
  
5.3.3. Specific objective 3: Circulation - Scenario 3 
Exhibit 29: Outputs and unit costs for specifi c objective 3, Scenario 3; 2011 to 2013 
Assumption Assessment 
1) Cinema network : 
The unit costs (per 
network) amount to 0.54 million Euro. 5 
outputs over the three 
years period (2 networks). The unit costs are based on the experience from MEDIA 2007 and in particular from 
Lot 3 (cinema networks) from the first year of the Preparatory Action MEDIA 
International (700 000 Euro  for putting in place one ne twork). Discussions with 
experts confirmed the desirability to support  new and additional networks, so that the 
different segments of the exhibition market  and different audiences can be reached. 
Hence, the envisaged output of 2 networks per year. 
Considering the number of cinemas particip ating in such networks and the direct 
effect on the value chain, the unit costs are very low. Compared with the only 
existing cinema network on an European level, which receives 7 million Euro from 
MEDIA for 1500 screens, this action will be able to support an average of 300 
screens in each network. The support would encourage cinemas to show a certain rate of European and third countries' fi lms, by subsidising 50% of the exhibition 
costs.   
Member States are not running such networks on European or international level. 
Therefore there is an important added value in that films are exhibited beyond their 
national borders, significantly contributing to global cultural diversity. Therefore 
there would be important European added value in terms of the implementation of the UNESCO convention on cultural diversity. 
2) Support to broadcasters and 
digital platforms : The 
average unit costs amount to 390.000 
Euro for the support of Unit cost is based on the MEDIA 2007 experience with the VOD support scheme 
and on discussions with experts. 
Considering the rigidity of the broadcasting market (high competition between 
programmes, risk adversity in particular relating to non national and non US- productions), groupings of broadcasters could tackle these problems and obtain a 
 
EN 56   EN Assumption Assessment 
5 projects associating 
European and non-
European broadcasters 
and VOD platforms over three years. price lower than the average market price.  This goes hand in hand with the new 
Audiovisual Media Service Directive
96, which qualifies co-productions as European 
works. 
For VOD platforms, the average unit cost is lower than the MEDIA-supported VOD 
platforms (average unit cost of 411.000 Euro). 
The envisaged output of 5 projects would be split between broadcasters and VOD 
platforms reflecting the new technological challenges and opportunities to internationally distribute content. 
The financial contribution would cover 50% of the costs so as to ensure the 
commercial viability and visibility of the selected projects, which is a key element in 
a very competitive environment. 
Member States are not financing similar projects and, apart from national and US 
productions, films are not widely distributed. Therefore there is an important added 
value in terms of consumer choice.  
3) Support for networks/partnerships 
dedicated to film 
literacy: Over the three 
year period 18 such 
networks and partnerships would be 
financed at a unit cost 
of 50.000 Euro.  The costs and the number of outputs (18 ov er the three year period) are based on 
experience with cinema networks, festivals and the organisation of events in the 
context of various generations of MEDIA programmes. Feature films, children’s documentaries, short films and animations would be presented to young audiences, 
in each case combined with an educational programme. E ligible costs would cover 
50% of the exhibition costs (including acquisition of rights and dubbing of the films) and 50-80% of the educational programme and of transport costs for children. With a 
lower co financing rate it would be difficult to find the respective partners with a 
similar international focus and investment capacity.  
In Europe children would see films from third countries and in third countries 
European films would be screened. Similar activities exist at national level but not 
promoting international cinema. The long term impact on viewing habits and the early education to cultural diversity, as well as the exhibition of films beyond their 
national borders are of added value and ju stify the interventio n. Therefore there 
would be important European added value in terms of the long-term implementation of the UNESCO convention on cultural diversity. 
 
Under scenario 3, most of the operational objectives and actions of specific objective 3 of scenarios 1 
and 2 have been split into the two following obj ectives: "Competitiveness and distribution" and 
"Circulation".  Hence, 60% of the budget would be devoted to distribution and circulation actions (vs 
around 50% in the case of scenarios 1 and 2). In rela tion to the problems identified, to the general 
objectives pursued by the programme MEDIA Mundus (circulation/diversity) and to the smaller 
budget of scenario 3, it is extremely important to con centrate a larger part of the intervention on these 
activity segments rather than that planned under scenarios 1 and 2.  
5.4. Comparison of alternative spec ific objectives / action lines 
Exhibits 30 and 31 summarises the extent to whic h the different operati onal objectives detailed and 
assessed under sections 4.5 and 5.2 are cost effective in relation to the global objectives identified in 
section 3. 
Exhibit 30: Likely effectiveness of the different objectives, Scenarios 1 and 2 
 Specific Objective 1: Information exchange and market intelligence RELEVANCE 
TO REACH 
OBJECTIVES 
                                                 
96   See footnote 2  
 
EN 57   EN 1) Building up Websites and Databases High 
2) Network of contact points Moderate to high 
3) Certification of training establishments None 
4) Initial training Moderate to high 
5) Continuous training  High 
6) Market access mechanisms High 
OPTIONS Specific Objective 2:  Facilitating international co-production activities 
Scenario 1 RELEVANCE 
TO REACH 
OBJECTIVES 
 1) Development  
a) Development fund for co-productions  Moderate 
b) Co-production markets/partner search (pitching) High 
 2) Co-production  
a) Co-production fund for feature films  Moderate 
b) Co-production fund for animation films Moderate 
c)Co-production fund for documentary films Moderate 
c) Gap financing Moderate 
Specific Objective 2: Facilitating int ernational co-production activities 
Scenario 2 RELEVANCE 
TO REACH 
OBJECTIVES 
 1) Development  
a) Script development High 
b) Co-production markets/partner search (pitching) High 
 2) Co-production  
a) Supplement existing co-production funds Moderate to high 
b) Access to finance  Moderate to high 
Specific Objective 3: Distribu tion and circulation support 
Scenario 1 RELEVANCE 
TO REACH 
OBJECTIVES 
1) Support to sales agents  Moderate  
2) Automatic distribution support Moderate  
3) Selective distribution support Moderate 
4) Cinema network High 
5) Support to broadcasters and digital platforms High 
 
Specific Objective 3: Distribu tion and circulation support 
Scenario 2 RELEVANCE 
TO REACH 
OBJECTIVES 
1) Support to partnerships of right holders, sales agents and distributors High 
2) Cinema network High 
3) Support to broadcasters and digital platforms High 
Specific Objective 4 : Reach new au diences and promote film literacy RELEVANCE 
TO REACH 
OBJECTIVES 
 
EN 58   EN 1) Festivals High 
2) Special events High 
3) Networks for targeting young audiences including education activities High 
4) Support for TV programmes dedicated to young audiences High 
  
Exhibit 31: Likely effectiveness of the different objectives, Scenario 3 
 Specific Objective 1: Information exchange and market intelligence RELEVANCE 
TO REACH 
OBJECTIVES 
1) Continuous training  High 
Specific Objective 2: Compet itiveness and distribution  High 
1) Co-production markets/partner search (pitching) High 
2) Support to partnerships of right holders, sales agents and distributors High 
Specific Objective 3: Circulation RELEVANCE 
TO REACH 
OBJECTIVES 
1) Cinema network High 
2) Support to broadcasters and digital platforms High 
3) Support for networks/partnerships dedicated to film literacy High 
 
5.5. Conclusion regarding the preferred operational objectives 
5.5.1. Scenarios 1 and 2 
In respect of specific objective 1: one action was di scarded, the certification of training institution (see 
Section 4.5.1. for details). 
In respect of specific objective 2: scenario 2 was c onsidered to be the most cost-effective and all 
proposed actions were evaluated favourably. The prop osed actions under scenario 1 were less effective 
and in addition had high administration costs. Faci litating international co-production activities, it is 
significantly less costly for the Commission to support existing funds compared to setting up funds for the development and the financing of co-producti ons. Furthermore, Member States have questioned 
whether direct funding of co-productions would be compatible with the subsidiarity principle. In 
addition the high administrative costs mean th at cost effectiveness is further reduced. 
In respect of specific objective 3: scenario 2 was considered to be th e most effective and all proposed 
actions were evaluated favourably. For distribu tion support, one operational objective focusing on 
partnerships between right holders, sal es agents and distributors appears to be more realistic to achieve 
the objectives of the initiative of 7% market share fo r EU works in third countries and vice versa over 
the three years, and would also follow the concept of  mutual benefit. This takes account of differences 
in market structures inherent in European and intern ational markets. On this basis exhibit 27 presents 
the preferred operational objectives:  
In respect of specific objective 4: all actions were favourably evaluated as contributing to the 
achievement of and all proposed actions we re evaluated favourably o this objective. 
Exhibit 32: Table of preferred operational objecti ves between the scenario 1 and the scenario 2 
Specific Objective 1: Information exchange and market intelligence 
 
EN 59   EN 1) Building up Websites and Databases 
2) Network of contact points 
4) Initial training 
5) Continuous training  
6) Market access mechanisms 
Specific Objective 2: Facilitating int ernational co-production activities 
 1) Development 
a) Script development 
b) Co-production markets/partner search (pitching) 
 2) Co-production 
a) Supplement existing co-production funds 
b) Access to finance  
Specific Objective 3: Distribu tion and circulation support 
1) Support to partnerships of right holders, sales agents and distributors  
2) Cinema network 
3) Support to broadcasters and digital platforms 
Specific Objective 4 : Reach new au diences and promote film literacy 
1) Festivals 
2) Special events 
3) Networks for targeting young audiences including education activities 
4) Support for TV programmes dedicated to young audiences 
 
5.5.2. Scenario 3 
The "crisis" scenario has been bu ilt in a way to maximise the effe ctiveness of the intervention given 
the budgetary constraint. Hence, only the most eff ective operational objectives and actions have been 
selected. They have been gathered in a narrowe r framework limited to three specific objectives 
(against 4 in the case of scenarios 1 and 2).    
Exhibit 33: Table of preferred op erational objectives, Scenario 3 
Specific Objective 1: Information exchange and market intelligence 
1) Continuous training  
Specific Objective 2: Compet itiveness and distribution 
1) Co-production markets/partner search (pitching) 
2) Support to partnerships of right holders, sales agents and distributors  
Specific Objective 3: Circulation  
1) Cinema network 
2) Support to broadcasters and digital platforms 
3) Support for networks/partnerships dedicated to film literacy 
   
 
EN 60   EN 5.6. Extension of MEDIA 2007 versus crea tion of a new programme MEDIA 
Mundus 
The question arises whether "extending MEDI A 2007" or "creating a new programme MEDIA 
Mundus" would be more effective for implementing the above assessed actions.  
From a procedural point of view both options would require a co-Decision procedure so there would 
be little difference between an amendment of the existing legal basis of MEDIA 2007 and the creation 
of a new programme.  
MEDIA 2007 is a support instrument for the internal market and it is not the objective to replace this 
instrument for the internal market, which is now in its fourth generation and has been progressively 
adapted to the needs of the Eur opean audiovisual industry. Therefore one could only add the proposed 
actions to the already existing actions under MEDIA 2007 as new strands alongside the existing 
activities supported by the MEDIA 2007 programme. One major problem is that these new strands 
would not fit into the concept of MEDIA 2007. Although several of the proposed actions cover 
activities similar to those in MEDIA 2007 (Training,  development, distribution, festivals…), the 
objectives pursued, their functioning, the professionals they concern are radically different from those 
of MEDIA 2007. The support amounts and intensities underline these strong differences. Other actions 
have been proposed under MEDIA Mundus but are not part of MEDIA 2007 (for example support to broadcasters, support to existing co-production fund s, literacy activities). Therefore the integration 
into MEDIA 2007 would be counterproductive sin ce it would create confusion amongst professionals 
and dilute the impact of the existing programme. Indeed, the separation of the MEDIA International 
preparatory action has shown how important a separ ate programme would be in terms of clearly 
defining objectives and support strands. 
Furthermore, it would not be possible to "extend" in any event the activities under MEDIA 2007 since 
although some current beneficiaries would also subm it international cooperation projects, the target 
group would not be the same and the impact is not achieved through the same mechanisms. Since 
wholly separate actions would be required to implement the proposals there are no advantages to 
extending the current programme but only drawback s evidenced by the differences between the 
activities. For example, MEDIA 2007 supports (as a sep arate mechanism) automatic distribution based 
on entries certified by Member State authorities allocated to individual distributors whereas MEDIA 
Mundus would award funding to a grouping of distributors, sales agents and right holders on a 
selective basis covering a number of territories for di fferent films. In addition certain priorities under 
the existing programme such as reducing the imbalan ces in the European audiovisual market have no 
relevance in an international c ontext, highlighting the fundament al differences in the approach 
required for international cooperation. 
From the point of view of costs, the costs of integrating the strands into MEDIA 2007 would be 
identical with the costs for a new programme. The executive agency EACEA, al ready dealing with the 
MEDIA 2007 programme would be entrusted with ME DIA Mundus. Therefore the synergies would be 
the same in both cases.  
Exhibit 34: Comparison of policy option 2 (extension of MEDIA 2007) and policy option 3 (creation 
of a new instrument) 
Success criteria Policy Option 2.1.  
Extension of MEDIA 
2007 (article 8) (see 
section 4.4 above) Policy Option 2.2. 
Extension of MEDIA 
2007 (integrating 
international activities) Policy Option 3 
Creation of a New 
Instrument 
Feasibility of option Low Low High 
Costs for EU budget Low Medium Medium 
 
EN 61   EN Success criteria Policy Option 2.1.  
Extension of MEDIA 
2007 (article 8) (see 
section 4.4 above) Policy Option 2.2. 
Extension of MEDIA 
2007 (integrating 
international activities) Policy Option 3 
Creation of a New 
Instrument 
Likelihood for achieving 
global and specific 
objectives Low Medium High 
Time needed for 
implementation of 
options High Low Low 
Risks involved  High  Medium  Low 
Contribution to better and 
transparent legislation Low Low High 
Overall assessment Not recommended: 
Unlikely to sufficiently 
contribute to achieving 
the objectives Medium:  
Same costs and effects as 
option 3 but could be 
counterproductive since 
likely to create confusion 
amongst professionals 
and dilute the impact of 
the existing programme 
 Recommended: 
Most transparent and 
effective option to 
achieve the objectives 
 
5.7. Risks and counter measures 
Risk management is fundamental for the further programme design. In the following section the risks 
that are likely to occur are identified and are asse ssed regarding the potential impact on the programme 
if the risk were to occur: 
1) Risk of dependency on public financing:  there might be a risk to increase the dependence of the 
audiovisual industry on public funding. However, the aim of the instruments to be developed is to 
provide a leverage effect and to create a fa vourable socio-economic environment for European 
companies to improve their competitiveness and theref ore to enhance their financial sustainability. 
The actions to be implemented would to a large ex tent consist of incentives for companies to seek for 
“private” funding abroad, mainly upstream and downs tream of the production stage For example: joint 
training measures would enable companies to build up networks with partners from third countries in 
order to “enlarge” the market for European companies or when opening new distribution markets, it 
would be the aim of the programme to expand the potential market of the works produced by 
European independent companies, consequently ex panding the potential return on investments in the 
sector. This higher return on investment would pr ovide them with additional working capital to 
develop new projects and to a certain degree make them less dependent on public interventions. The 
creation of a new fund (as already shown by the va rious generations of MEDIA programmes) does not 
create greater dependency but encourages the cr eation of networks and the inclusion of a 
European/global dimension in projects.  
As a counter measure, co-financing will be the ru le, obliging companies to co-finance with proper 
funding. 
2) Sectoral risks:  With its particular value chain and prod uction cycle the audiovisual sector carries 
very high financial risks (see section 2.3). As a counter measure MEDIA Mundus would aim at reducing such risks by improving access to internat ional finance for the sector’s small and medium 
 
EN 62   EN sized enterprises and by favouring networking in view  of international co-productions. The latter can 
contribute directly by increasing the production budget and therefore the potential circulation of the 
works and indirectly by diminishing the investme nt risk thanks to the increase of revenues from 
exploitation, which would in turn attract privat e capital into production financing. As it requires 
massive investments upfront without any guaranteed r esults distribution is a particularly risky activity. 
That is why a substantial part of the budget would be dedicated to distribution activities.  
3) Risks of running the programme:  From a general point of view, flexibility to adapt the programme 
to changing economic and technological circumstances  should be guaranteed by instruments for close 
monitoring of the European and international audi ovisual sector: trend analysis studies and expert 
advisory groups and by regular a udits (ca. 30 per year) of the beneficiary companies. As a counter 
measure  a contact points network in various regi ons of the world should help reduce risks (1) by 
monitoring foreign audiovisual markets in terms of  market opportunities, (2 ) by describing for each 
country the difficulties and structural risks likely to affect the effectiveness of MEDIA Mundus and 
(3) by identifying for each country the potential and the conditions, but also the risks for cooperation 
with the European audiovisual industry (i.e. info rmation on reliability of potential partners).  
3) Risks of monitoring the programme: There will be two levels of monitoring, the programme and 
the individual projects. In respect of the individual  projects see "financial viability risks" below. In 
respect of the implementation of the programme  objectives, counter measures will include close 
monitoring of the European and international audi ovisual sector: trend analysis studies and expert 
advisory groups. This will enable the guidelines to  be modified as required to ensure that the 
programme as implemented closely corresponds to the objectives set out. 
4) Financial viability risks : in a very volatile sector, mainly made up of SMEs, risks of bankruptcies 
and non completion of the projects are real. It is a ll the more true as some companies might explore 
the international market for the first time with  MEDIA Mundus.  As a counter measure particular 
attention will be paid to financia l viability check and, where approp riate, for example bank guarantees 
will be requested from beneficiaries or benefici aries will not receive pre-financing but will only 
receive any grant after completion of the project and presentation of the final report. 
5) Risk of  lack of response from the professionals: there is always some uncertainty as to the reaction 
of the potential beneficiaries of a new initiative. As  a counter measure professionals of the audiovisual 
sector have been extensively consulted (see section 1. 2): they have clearly expressed their needs, their 
interest and their willingness to participate, whic h was confirmed by their response to the call for 
proposals for the Preparatory Action MEDIA Interna tional. As demonstrated above the instruments 
already in place (Euromed Audiovisual, ACP support programme, Ibermedia, international film funds…) will not prevent professionals from partic ipating in MEDIA Mundus since they have a 
regional focus and/or a limited scope, a mode st budget and no reciprocity dimension.  
6) Risk of overlap with MEDIA 2007 and EUROMED& ACP:  As explained above, the Programme 
objectives differ significantly from those of both MEDIA 2007 (internal market) and the two development programmes Euromed Audiovisual and ACP (see section 4.3.-4.4. above). Where beneficiaries could receive funding from more than one programme (as is currently the case under MEDIA 2007 and Euromed Audiovisual) counter measures will be put in place to ensure there is no 
duplication of costs claimed. 
7) Risk of losing incentives for third co untries not to take WTO commitments:  since MEDIA 
Mundus  would be WTO compatible third countries w ould be able to participate without taking 
exemptions to the Most Favoured Nation (MFN) rule . They might therefore lose a major incentive to 
do so in the future. While acknowledging the risk it h as to be said that it is still necessary to take MFN 
exemptions to participate in the MEDIA 2007 progra mme, so third countries still have an incentive not 
to take WTO commitments. 
 
EN 63   EN 5.8. Lessons from the past 
The numerous evaluations (ex-ante, ex-post, interi m) of the different generations of the MEDIA 
programme (MEDIA I, 1991-1995; MEDIA II 1996- 2000; MEDIA+ and MEDIA Training, 2001-
2006) had an impact on the set-up and de sign of the objectives and actions.  
Frequent evaluations confirmed that a Community  programme to assist the European audiovisual 
industry was fully justified by the economic situation in the audiovisual sector. The focusing of resources on development, distribution and training was appropriate for tackling the weaknesses of the 
European industry, the fragility and lack of compe titiveness of European audiovisual products arising 
to a large extent from chronic under-investment  both upstream (training, development) and 
downstream (distribution) of the production process. It also underlined the complementarity between 
national measures and the MEDIA programme. During the period 1996-2000, the bulk of national aid 
(84%) was for production, while MEDIA II focused on training, development and distribution. The 
few instances of national aid for distribution were chiefly in support of national films, while MEDIA 
II exclusively encouraged the distribution of non-na tional European films. In the area of cinema  
exhibition, national aid was chiefly for structures, while MEDIA II support was chiefly for cinemas to 
show European films. In the area of development,  national aid was insignificant except in Germany, 
Finland and France. MEDIA II proved to be well suited to the specific n eeds of the European 
audiovisual sector, which comprises mainly small and medium-sized enterprises and is marked by an 
economic imbalance between countries with str ong production potential and countries with a low 
production capacity and/or a restricted linguistic and geographical area.  
The interim and final evaluation of MEDIA Plus and MEDIA Training confirmed the relevance and 
effectiveness of the MEDIA programmes, both in terms of strengthening the sector's competitiveness 
and promoting European linguistic and cultural di versity. The interim evaluation also reported " that 
MEDIA acts to consolidate the Internal market and to improve its transparency, to facilitate trade. 
Community action enables European industry to brea k through where American competition is at its 
strongest, i.e. on cinema screens, and provides durable funding for the companies in the audiovisual 
sector. For example in the distribution sector, 98 films supported by the MEDIA Plus Programme 
made more than 50,000 entries outside their country of origin. 11 even exceeded one million entries in 
2001. Overall, 9 films out of 10 distributed outside th eir country of origin benefited from the aid of 
MEDIA ". Furthermore, the MEDIA programmes supported the creation of Europa Cinemas: a cinema 
network of around 670 independent theatres with more than 1500 screens in some 300 cities within 
Europe. This network plays a key role in boosti ng the screening of European films (and especially 
non-national ones) within Europe. The final eval uation also confirmed the added value of the 
Community action and notes concrete and sustainable effects on the industry: each Euro spent within 
the programme thus generates an average some 6 Euro  in the European audiovisual industry. It also 
concluded:  " The main mechanisms of MEDIA contribute e ffectively towards enhancing competencies 
(Training), developing the European dimension of works from the pre-production phase (Development), improving the competitiveness of the sector (Distribution, mainly, by reducing risks 
and strengthening the beneficiaries' financial capacities) and promoting the cross border circulation 
of works (Distribution et Promotion) ". Finally, the evaluation report of the MEDIA Plus programme
97 
highlighted the importance of international mark ets to overcome the problems of the European 
audiovisual industry.  
The results of these evaluations have influenced the definitions and to a certain extent the assessment 
of the proposed activities. 
 
                                                 
97  http://ec.europa.eu/information_society/me dia/overview/evaluation/reports/index_fr.htm   
 
EN 64   EN 5.9. Comparison of policy options 
A comparative assessment of the three basic policy options shows that "business as usual" does not 
address effectively the key problem of poor ci rculation of European audiovisual works on 
international markets or of foreign films on Europ ean markets. "Business as usual" does not entail new 
costs, but has a negative cost (which cannot be ca lculated in a credible way). Without a further 
initiative the revenues of European audiovisual industries will be limited to the saturating Internal 
Market and the European Audiovisual industry will lose out on international opportunities. 
The options "extending the existing MEDIA 2007 programme" by amending it and adding the 
proposed actions (see exhibit 27 for selected actions  after cost effectiveness discussion) would meet 
the Community's policy objectives and the indust ry's needs. Option 2 "extension of existing 
instruments" could include the activities proposed unde r Option 3 "creation of new instruments" if the 
legal basis of MEDIA 2007 were modified. This howev er was shown to be less effective than the 
creation of a new instrument (see sections 4.4 and 5.6 above).  
Therefore the recommendation is to set up a ne w support programme, implementing the preferred 
actions (see exhibits 32 and 33 a nd details in annexes 11 and 12), in order to meet the specific and 
global objectives. 
Exhibit 35: Comparison of policy options 
 Effectiveness Costs Risk Overall assessment 
OPTION 1 0 negative high Inoperable 
OPTION 2 Medium medium high Inadequate 
OPTION 3 High medium moderate Winwin 
 
6. SECTION 6: MONITORING AND EVALUATION  
Reliable data on implementation and results of Comm unity intervention has to be the basis for the 
evaluation of the impact of a new programme. Ther efore, the definition of monitoring and evaluation 
arrangements is essential for the potential new progr amme The following sub-sections 6.1. and 6.2. 
describe the methodological approach for monitoring and evaluation: 
6.1. Nature and frequency of the evaluation process 
Any evaluation of the programme should be done ex ternally and independent ly, addressing relevance, 
effectiveness, efficiency and utility of the programme. 
In terms of the frequency of ev aluations (the proposed programme  should run between 2011 and 2013) 
one final evaluation should be carried out. A meaningful assessment of impacts and results in the context of the ex-post evaluation report would be submitted to the Eu ropean Parliament, the Council, 
the Economic and Social Committee and the Committee of the Regions by December 2015. 
Any extension of the programme beyond 2013, would be subject to an ex ante evaluation and an 
external impact assessment study which would form  the basis of a Communication on the continuation 
of the programme, to be presented to the European  Parliament, the Council, the Economic and Social 
Committee and the Committee of the Regions by 30 June 2012. This ex-ante evaluation would be 
based on the results of the first 12 months of the ne w (3 year) programme and also of the preparatory 
action. It would, therefore replace a mid-term evaluation of the programme. It would follow standard evaluation benchmarks. It would thus provide valuable input for deciding on adapting/modifying 
objectives/actions. Immediate/initial results analy sed qualitatively and quantitatively in the ex-ante 
 
EN 65   EN evaluation would feedback into both: the thir d annual work programme of MEDIA Mundus (2011-
2013) and the decision making process for a possibl e extension of the programme beyond 2013.  
 
6.2. Monitoring - Choice of indicators 
For the potential new programme, systematic collecti on of monitoring data would be based on clearly 
established objectives and indicators. 
Annex 15 illustrates the result indicators proposed per specific objectives and annex 16 shows the 
most important output indicators per operational objective / action line. 
The Commission would continuously monitor the pr ogramme and results of the monitoring would be 
taken into account in the implementation of the programme.