Opinion on the proposal for a Council Decision amending Council Decision 90/685/EEC concerning the implementation of an action programme to promote the development of the European audiovisual industry (Media) (1991-1995) (1) (94/C 148/02)

On 22 November 1993 the Council decided to consult the Economic and Social Committee, under Article 130 of the Treaty establishing the European Economic Community, on the abovementioned proposal.

The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the Committee's work on the subject, adopted its Opinion on 2 March 1994. The Rapporteur was Mr Flum.

At its 314th Plenary Session (meeting of 23 March 1994) the Economic and Social Committee unanimously adopted the following Opinion.

1. Introduction

1.1. The Council Decision of 21 December 1990 concerning the implementation of an action programme to promote the development of the European audiovisual industry (Media) (1991-1995) (2) states that 'after the programme has been in operation for two years ... the Commission shall present a report on the results achieved to the European Parliament, the Council and the Economic and Social Committee'.

1.2. The Commission submitted this report [COM(93) 364 final] on 23 July 1993 and referred in it to the audit of the programme, dated 4 April 1993, which it had commissioned from an independent management consultancy firm (Roland Berger & Partners: Interim evaluation of the Media programme). The Commission highlighted the following 'objectives' and 'lines of action' of the Media programme:

- 'to develop the programme industry';

- 'to help preserve and enhance cultural identity',

- 'to improve the environment of the European industry.'

In short: 'Media is a programme for the economic promotion of the cultural products generated by the audiovisual industry'.

1.3. This programme clearly requires time. After two years neither the Commission nor the audit report discern any 'significant changes on the European market.' 'Significant changes can be expected to take five to ten years.' The Commission comes to the conclusion that 'under the present Media budget, the resources available for restructuring - which is of vital importance - are inadequate'.

1.4. On this basis the Commission has been asked by the Council to submit a proposal for a Decision amending the Media programme [COM(93) 462 final], and the European Parliament and the ESC have been asked for their Opinions (3). In its first statement, dated 20 September 1990, on the planned Media action programme, the Committee said: 'In view of the programme's importance however the Committee feels that the funds earmarked for it are insufficient and should be increased'.

1.5. Council Decision 90/685/EEC provided ECU 200 m for the period 1991-1995. It is already clear however that by the end of 1994, after the programme has been running for only four years, ECU 174 841 000 will already have been used up. The Commission argues that there are good reasons for this overshoot: the general economic recession, greater competition from outside Europe, insufficient investment returns owing to the long time frame involved in the distribution and marketing of audiovisual productions, and finally the high rate of take-up by the industry of support for basic and further training.

The Committee would comment on the resultant Commission proposals for strengthening the Media programme as follows.

2. General comments

2.1. The Committee welcomes in principle the increase in funding for the Media programme, but would ask the Commission to consider the following points.

2.2. The objective of the Media programme should be not merely to promote audiovisual production structures in the EC, as this would take insufficient account of non-European economic interests (e.g. acquisition of stakes or takeovers by US groups) and of the marketing pressure of their low-cost productions. The objective should rather be to safeguard or re-establish cultural identity in the Member States, an area where TV and radio can make a contribution.

2.3. In this context account must be taken of the economic, social and cultural interests of broad groups of consumers, as well as of the high cost of home-produced cultural productions. Finance should therefore be allocated to production which at least maintains, and preferably promotes, Europe's cultural diversity. Europe's schools could also be involved in such projects.

2.4. The exclusion of the audiovisual sector from the GATT agreement of December 1993 leaves European governments scope to shield film and television from overwhelming US competition and to grant appropriate support, particularly in the light of cultural policy considerations. To this end, cooperation between European producers which currently leaves something to be desired, should be encouraged and reinforced. Seen in this light the decision further underlines the need for the Media programme, which should not however be limited to film and television, but should also cover European radio. Radio programmes are after all well suited for developing and reinforcing communication across national boundaries.

2.5. On the other hand, the effects of extending the Media programme to third countries should be studied to see whether the strengthening of Europe's audiovisual industry - which is the objective - might be undermined by spreading the funds too thinly.

2.6. Long lead times alone, and their effects, make it necessary to prepare for an extension of the Media programme beyond 1995.

3. Specific comments

3.1. The Commission proposal leaves open a number of questions which, the ESC feels, should be examined in more detail and clarified.

3.2. For example, Annex 1 lists among the 'measures to be put into effect' 'increased support for cross-frontier distribution' (point 1.1), although in paragraph 2.3 of the Communication the Commission states that 'in Germany film distribution is 98 % dominated by the US'. The Commission should therefore make it clear which areas of distribution are to be supported and what limits placed on this support. The available funds should not be used for distribution projects proposed by media groups or their subsidiaries.

The Commission should also consider the extent to which concentration in film distribution raises competition-policy questions.

3.3. Another unanswered question concerns the target groups to be reached by 'increased support for European films' (point 1.1 of Annex 1), given that the cinema industry is increasingly dominated by a small number of large groups. The ESC feels that, in assessing suitability for support, a distinction should be made between cinema chains on the one hand, and on the other provincial cinemas in sparsely populated areas and small, local cinemas or non-profit-making community cinema clubs.

3.4. The ESC would like clarification as to exactly what is meant by 'development of markets and support for the distribution of independent productions' (point 1.4). If the purpose of these measures is to support audiovisual productions regardless of their commercial interests, there would be little objection to these measures covering, say, projects by groups of film makers. The productions of media groups should not however receive support.

3.5. With regard to a 'contribution to the establishment of a 'second market' using archive material' (point 2.4), market-dominating European film distributors must not receive support from the Media programme for the cataloguing, conservation, restoration and rescuing of films.

4. Conclusions

4.1. To sum up, the Committee concludes that the Commission Communication needs amplification. The Committee's suggestions and reservations should therefore be taken into account. In this connection, the Committee would also refer to its Opinion of 20 February 1990 in which it called on the Commission to 'set out more accurate information so as to clarify which of the twelve individual measures provide for non-refundable grants repayable loans, grants tied to the success of productions or advances on income from productions, guarantees or interest-rate subsidies' (point 4.1). And it would reiterate the conclusion reached at that time that 'it is therefore of particular importance that economic, social and cultural groups be appropriately involved in the audiovisual sector' (point 3.7.1).

4.2. The Committee too would like to be involved before the final Commission proposal is drawn up in those special cases where large-scale consultation of the parties concerned is undertaken in drafting Community programmes of this kind.

4.3. With this in mind, the ESC would ask the Commission to include it on the list of recipients of the Green Paper to be drawn up in the first half of 1994, to refer the Green Paper formally to the Committee for its Opinion, and to invite its representatives to the public hearings to be held.

4.4. The Commission should also involve the ESC in good time in connection with the planned amendment of the Directive on Television without Frontiers.

Done at Brussels, 23 March 1994.

The Chairman

of the Economic and Social Committee

Susanne TIEMANN

(1) OJ No C 322, 30. 11. 1993, p. 15.

(2) OJ No L 380, 31. 12. 1990.

(3) OJ No C 332, 31. 12. 1990.