Opinion of the Economic and Social Committee on:

- - the "Proposal for a Decision of the European Parliament and of the Council on the implementation of a training programme for professionals in the European audiovisual programme industry (MEDIA - Training) (2001-2005)", and

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

(2000/C 168/03)

On 6 March 2000 the Council decided to consult the Economic and Social Committee, under Article 262 of the Treaty establishing the European Community, on the above-mentioned proposals.

The Section for Transport, Energy, Infrastructure and the Information Society, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 6 April 2000. The rapporteur was Mr Hernández Bataller.

At its 372nd plenary session of 27 April 2000 the Economic and Social Committee adopted the following opinion with 111 votes in favour and one abstention.

1. Introduction

1.1. The industries connected with the information society, particularly the audiovisual industry, are one of the sectors in the European Union with the greatest potential for growth. Studies estimate that revenues in this market will increase by 70 % by 2005, an increase which could give rise to the creation of more than 300000 highly skilled jobs over this period alone(1).

1.2. Digitalisation, interactivity and technological convergence are profoundly changing the traditional audiovisual industry as a result of the emergence of new forms of design, production and distribution using new agents, new content and services and new, direct and derived modes of exploiting works.

1.2.1. Moreover, these changes are complementary to, rather than a substitute for, more traditional forms. In addition to the accelerating growth of digital television and new applications like on-line services, interactive television, video-on-demand (VOD) and electronic dissemination in cinemas, growth is also occurring in more traditional segments of supply like the sale of videos and the production and showing of cinematic works.

1.2.2. Against this background, the production of audiovisual content can be seen as a major added-value sector for the 21st century, potentially capable of promoting the development of a competitive European industry and, ultimately, economic growth in the European Union.

1.3. But if the audiovisual content industry is going to be able to fulfil its role of economic and entrepreneurial engine, it will be necessary to tackle appropriately certain basic challenges of a structural nature. These are in some cases challenges facing the whole of the industry, such as diminishing revenue from each showing (with greater fragmentation of the audience) and the effective internationalisation of means of exploitation; in other cases, however, they are specifically European weaknesses:

- The fragmentation of national and regional markets, which impedes the transnational movement of programmes in Europe.

- The low level of investment in the planning and execution of audiovisual projects, which in turn diminishes the profitability of works and reduces the capacity for future investment.

- The insufficient capitalisation of companies which weakens their international development strategy.

1.4. The European audiovisual content industry is weak. It is not yet able to withstand growing international competition; this makes it necessary to draw up financing strategies concentrating on boosting international development, integration, distribution and marketing capacity. It is essential that governments support these initiatives by means of specific and complementary financial measures aimed at increasing the product range, particularly in the most innovative segments of the market. The quality of European production - thanks to more effective training - and the capacity to establish a position in a global market, thus increasing market share, can increase European audiovisual content producers' share of the industry's revenues.

1.5. Since 1997 the Commission has been engaged in a detailed study of its audiovisual policy in order to take account of the current and future implications of the advent of the digital age. These activities have included the Media II programme(2), the remarks and contributions received in response to the report from the High-Level Group on Audiovisual Policy(3) and the consultation of professional circles carried out by the Commission at the conferences held in Birmingham (April 1998) and Helsinki (September 1999), as well as the Green Paper on the convergence of the telecommunications, media and information technology sectors(4).

2. Commission proposal

2.1. The aim of the Commission proposal for the Media Plus programme is to establish optimum conditions based on a coherent strategy and with clear objectives so as to continue to help alleviate the problems identified by the European audiovisual industry, enabling players to occupy an optimum position in the new markets.

2.1.1. The approach adopted to supporting European players must be pragmatic and must be adapted to the needs of the audiovisual market, with particular attention for structural measures. It also has to boost the added value associated with the common European area and the cultural and national diversity of the Member States.

2.1.2. In the light of the above, the following are needed:

- An information and monitoring system for the new needs and developments of the audiovisual market, together with the exchange of experience between the Member States in order to establish effective synergies.

- Emphasis on transnational dissemination of European audiovisual works, both within and outside the European Union.

- Complementarity and coherence with other Community measures following a common strategy, such as the education and training programmes, the support programmes for SMEs and information society technologies, the e-Europe initiative(5), the User-friendly information society programme of the 5th Framework Programme for Research and Technological Development(6), the INFO 2000 and MLIS programmes, other training programmes like Socrates and Leonardo, collaboration with institutions like Eureka(7) etc.

- The desired complementarity with policies implemented at national and regional level, with greater consideration for the specific needs of the industries in countries with lower audiovisual capacities and/or restricted geographic and linguistic area.

- The application of aid at those stages of the audiovisual chain where intervention can bring greater added value (mainly at the beginning and end of the production process).

- The appropriate and systematic evaluation of aid, together with suitable adjustments and greater use of automatic support mechanisms based on market performance.

- The carrying out of pilot projects which, having achieved convincing results, will make it possible to adapt the programme's main aid mechanisms immediately(8).

- The extension of cooperation with third countries which share the European Union's objectives in terms of audiovisual content policy.

2.2. Like the Media II programme, the activities provided for under the MEDIA Plus programme concentrate aid on two different areas of activity: education and vocational training (Article 150 of the Treaty) and industry (Article 157 of the Treaty)(9), which includes project development, production, distribution, marketing and promotion.

2.2.1. To this end two proposals for Council decisions have been drawn up, the aim of which is the application of a policy geared to market characteristics and to optimising the advantages which the European audiovisual content industry can derive from technological progress.

2.2.2. The financial aid arrangements will be periodically reviewed and adjusted. On the basis of these reviews, the Commission may propose complementary activities for both instruments.

2.3. In the field of training (Media Training), the measures proposed are mainly aimed at:

- application of the new technologies to the production and distribution of audiovisual programmes with a high artistic value and a strong commercial potential;

- exploitation of the development potential of the European and international market;

- economic management at European and international level, including the legal aspects, financing of production, marketing and distribution;

- writing techniques, in particular for interactive programs intended for the new means of electronic dissemination.

2.4. The development and production of high-quality audiovisual programmes capable of generating substantial income on a growing number of media calls for considerable investment. Media Plus support must start at the stage of preparing the projects through adequate development to determine the feasibility of the project, the expected profitability of the work in the light of the cost of its production, and its commercial potential. This process, which is widespread in other sectors of industry, remains too restricted in the case of audiovisual works and often leads to the production of projects of limited economic viability.

2.5. The support for distribution and marketing is the most important chapter of the action in the framework of the proposed Media Plus programme, as it directly concerns the amortisation and profitability of the investment which is essential to ensure that European audiovisual content occupies a solid position in the market. This requires the creation, and above all, exploitation of catalogues of works, such as cinema films, drama, documentaries and cartoons which can be used and reused through different channels and in different formats.

2.6. The specific aims of aid to promotion are in general similar to those for aid to distribution. However, the mechanisms complementary to those established for distribution aim at improving access to European and international markets for European works and programmes.

2.7. The measures implemented under the development, distribution and promotion chapter must comply with the competition provisions of the Treaty, especially the rules on state aid.

3. General comments

3.1. The Committee supports the Commission proposal which contains complementary measures to promote the dissemination of the common cultural heritage, although it feels that:

- the financial resources earmarked for the Media Plus programme are insufficient to achieve the ambitious objectives set. The Committee therefore suggests that funding be increased. Market mechanisms in the sector are inadequate in some areas, given that the European financial sector generally does not participate in investment by the audiovisual sector, being unwilling to run risks in these sectors;

- this fact should be highlighted in the proposal, given that the promotion of our cultural identity is involved;

- it would be helpful if the sector were to have access to more data on the evaluation of previous programmes, as the existing data is inadequate;

- priority should in particular be assigned to technological development and innovation, as well as to improved distribution of funds;

- The Commission should set up a European information society agency which would help coordinate the various multimedia convergence initiatives.

3.2. Thus there exists a real need for the adoption of this proposal, first because of the added value its adoption will bring, and also because it will encourage the free movement across national frontiers of audiovisual works, strengthening and improving the competitiveness of the European audiovisual production industry as well as knowledge of the European cultural identity, all of which fully justifies Community intervention in this field.

3.3. However, the Committee regrets that the proposal has not taken account of the fact that the importance of the European audiovisual industry does not derive exclusively from its entrepreneurial dimension, but also from its role as a vehicle for the promotion of our culture and democratic values.

3.3.1. The recognition of the cultural dimension of the audiovisual industry, which has a unique product, explains the approach to the audiovisual media traditionally followed in Europe of aiming to strike a balance between:

- on the one hand, the right to freedom of expression and information, which is inseparable from any democratic society, and

- on the other hand, the defence of the general interest, the principle underlying the protection of minors, the fight against racism and xenophobia, the safeguarding of the right to privacy, the development of social cohesion and the guaranteeing of pluralism, among other objectives.

3.4. The proposal should evaluate the jobs which could be generated by its application. The audiovisual sector has strong growth potential in this area, and the Commission, in formulating and applying Community policies and measures, should always take account of the objective of achieving a high level of employment.

3.5. As for aid for training, this should be an instrument for promoting coordination between vocational training centres and universities, thus avoiding the danger of excessive dispersal of aid. The ESC hopes that operational criteria will be established ensuring that maximum use is made of the programmes and the corresponding financial resources, with greater emphasis being placed on education of young people.

3.5.1. At all events, it is considered important that there be an effective and lasting interconnection at European level between training centres and interested firms, in order to ensure a balance between basic and specialised training, thus underpinning the development of on-going training of audiovisual professionals, and exploiting opportunities for:

- distance learning using new technologies and applying these to the production of audiovisual works;

- innovative approaches to education offered by the new technologies, especially digital technology.

3.5.2. Suitable vocational training measures can improve the capacity for vocational integration and retraining, encourage the entrepreneurial spirit, especially by means of measures to stimulate technological innovation in favour of SMEs, and promote equality of opportunity between operators, at the same time as exploiting European cultural and linguistic diversity via the adoption of this kind of complementary measure.

At all events, every effort must be made to ensure that training is geared to actual realities, with the main stress being placed on education of young people.

3.5.3. The ESC proposes that the Commission include measures for the active promotion of greater participation by women in the implementation of the training programme, ensuring that women are in future better represented in the sector as this will encourage the sector's development.

3.6. As for measures to stimulate the development, distribution and promotion of audiovisual works, the Committee considers it necessary to create more favourable conditions for the European audiovisual industry, promote the work of European audiovisual-sector firms and especially improve access to the market for independent firms. It also considers essential all measures which improve public access to the European audiovisual heritage by means of digitalisation and interconnection at European level, particularly educational measures. In principle, the ESC considers that emphasis should be placed more on the development of audiovisual works than on distribution and promotion.

3.6.1. The proposed cooperation measures between broadcasters should be developed, particularly activities involving specialised bodies, such as audiovisual Eureka, in order to implement joint measures that meet the programme objectives in the field of promotion.

3.6.2. Pilot projects should be developed in the framework of e-Europe in order to harmonise and coordinate all investment support measures in the audiovisual sector and exploit existing synergies between different aid mechanisms. The Committee reiterates the need for reports which are sufficiently detailed to enable the results so far achieved with the various instruments for promoting the audiovisual industry to be evaluated; the reports should be submitted for consideration by the other Community institutions and bodies.

3.6.3. The Committee welcomes the plans to provide for effective coordination with measures undertaken in the field of new technologies, in particular those provided for in the Fifth Framework Programme, as it is essential that the Community product be of high quality in order to justify the confidence to undertake research under the Framework Programme.

3.6.4. Effective incentive mechanisms need to be established for the financing of enterprises presenting groups of projects, with preference for automatic aid systems ensuring maximum transparency.

3.6.5. The ESC considers that priority should be given to products which can be marketed commercially over an extended period in various markets. With regard to the distribution of programmes, the Committee favours the promotion of subtitling, thus seeking a balance between respect for the integrity of the work, cultural variety, cost optimisation and audience preferences; subtitling and dubbing should be used in a complementary way, as technology is making the striking of such a balance increasingly practicable.

4. Finally, the Committee regrets that the Commission has not been more ambitious, from the financial and added value points of view, in the objectives set for the programme, specifically:

- the Committee reiterates that, in order to act in a more tangible way in the cultural field and promote the European cultural identity, giving it a political dimension, user awareness and information will be required as well as services to industry and the Member States. To this end, the Commission should set up a European Information Society Agency which would help coordinate the various initiatives in the field of multimedia convergence.

- This agency, proposed by the ESC on the basis of the Oulu Declaration, could be an effective and non-bureaucratic channel for financing, cooperation and coordination in the various areas, spanning the whole production-distribution chain, providing a distinctive European "label" and making combined use of the financing instruments provided.

- other promotion instruments should be established in the audiovisual sector, such as the Guarantee Fund, the establishment of which has been proposed by the Commission but which is currently blocked.

Brussels, 27 April 2000.

The President

of the Economic and Social Committee

Beatrice Rangoni Machiavelli

(1) Study carried out for the Commission by Norcontel Ltd, Economic Implications of New Communications Technologies on the Audiovisual Markets, final report, 15 April 1997.

(2) ESC Opinion on the proposal for a Council Decision on the implementation of a training programme for professionals in the European audiovisual programme industry (Media II - Training) OJ C 256, 2.10.1995.

(3) The Digital Age: European Audiovisual Policy, report of the High-Level Group on Audiovisual Policy, Luxembourg, 1998.

(4) COM(97) 623 final and COM(1999) 108 final; ESC Opinion, OJ C 214, 10.7.1998; the conclusions of the Birmingham and Helsinki conferences are available at the following web sites: http://europa.eu.int/eac and http://presidency.finland.fi.

(5) e-Europe - an information society for all, COM(1999) 687 final.

(6) ESC Opinion on the fifth framework programme for research and technological development (1998-2002), OJ C 407, 28.12.1998.

(7) Audiovisual Eureka is a pan-European intergovernmental organisation established in 1989 with the aim of promoting the European audiovisual industry. It has 35 members (the Member States, the European Commission and the Council of Europe with associated member status).

(8) OJ C 343, 11.11.1998, pp. 10 to 16.

(9) The Media II programme was also based on two Council Decisions: in the field of training (Article 127 of the Treaty) the programme was implemented by Council Decision 95/564/EC of 22 December 1995, OJ L 321, 30.12.1995, p. 33); in the field of development and distribution (Article 130 of the Treaty), the programme was implemented by Council Decision 95/563/EC of 10 July 1995, OJ L 321, 30.12.1995, p. 25.