COMMISSION OF THE EUROPEAN COMMUNITIES 
C0MC90) 132 final 
Brussels, 4 May 1990 
Commission Communication to the Council 
accompanied by two proposals for Council Decisions 
relating to an 
ACTION PROGRAMME 
TO PROMOTE THE DEVELOPMENT OF 
THE EUROPEAN AUDIOVISUAL INDUSTRY 
"MEDIA" 
1991-1995 
nONTENT S 
l. Preamble 
2. Context 
2.1 The programme industry: a growth sector 
2.2 A major problem : the mismatch, between supply and demand 
2.3 Important observation : the accentuation of "non-Europeann supply 
2.4 A solution : the creation of Community cooperation structures 
3. An action programme for the promotion of the European 
3.1 What the Community has done so far : the MEDIA pilot phase 
3.2 Principles of Community action 
3.2.1 Contributing to the completion and operation of a 
substantial part of the common market in services 
3.2.2 Departitioning of the national markets and creation 
of cross-frontier cooperation networks 
3.2.3 Support for the restructuring of the audiovisual industry 
with priority for small firms 
3.2.4 Finding the right balance between "small" and "large" 
industries 
3.2.5 Launching a coherent set of complementary measures, whose 
specific value lies in the Community dimension 
3.2.6 Large-scale recourse to market finance for the 
programmes industry 
3.3. Lines of action 
3.3.1. Mechanisms for encouraging distribution and commercial 
promotion 
3.3.1.1 Film distribution in cinemas 
3.3.1.2 Distribution in video-cassettes and on television 
3.3.1.3 Support for multilingualism in television 
programmes 
3.3.1.4 Development of the independent productions market 
3.3.2. Mechanisms to iirrprove production conditions 
3.3.2.1. Developing preproduction 
3.3.2.2. Restructuring the cartoon film industry 
3.3.2.3. Promoting the use of new European 
technologies in programme production 
3.3.2.4 Creation of a "second market" using archive 
material 
3.3.3. Mechanisms to stimulate financial investment in the 
audiovisual sector 
3.3.4. Development of professional ski lis 
3.3.4.1. Activities linked to the other lines of 
action 
3.3.4.2. Training of "new managers" to cope with the 
single market 
3.3.5. Other developments 
3.3.5.1. New audiovisual services 
3.3.5.2 Audiovisual activities in countries and 
regions with lesser audiovisual capacity or 
limited language area 
3.3.6. Synergies with Audiovisual EUREKA 
3.3.6.1. Two complementary instruments 
3.3.6.2. The Community action programme extended to 
include new partners 
3.3.6.3. The Community as a partner in Audiovisual 
EUREKA projects 
3.3.6.4. Other forms of participation in Audiovisual 
EUREKA 
4. Promoting cooperation with professiQTV\>S of non-Community European 
countries. jnrTh-irHng Central and Eastern Europe 
5. Conclusion 
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1. PREAMBLE 
In its Communication to the Council and Parliament on audiovisual policy 
(CCM(90)78 final), the Commission defined a general framework for measures 
to promote the European audiovisual programme industry. 
Pursuant to the plan of work announced in the Communication, the Commission 
is presenting to the Council these proposals for Decisions relating to a 
five-year action programme starting in 1991 based on the results of the 
MEDIA pilot experiments and setting out the arrangements for the 
Community's involvement in Audiovisual EUREKA. 
Without repeating in full the analysis of the European audiovisual market 
presented in the Communication, it is worthwhile recalling a number of 
facts which justify the proposed programme and explain the urgent need for 
its introduction. 
2. QCKEEHI 
2.1 THE PROGRAMME INDUSTRY: A GBCWTH SECTOR 
The audiovisual sector is now seen as a strategic sector for the services 
industry in the European Community. Although relatively modest in economic 
terms, its growth is significant: put at ECU 25 billion in 1990, it should 
grow to around ECU 35 billion at the end of the decade. In addition to its 
potential for economic growth, the audiovisual sector is important because 
of its socio-cultural dimension: as a vehicle for the wealth and diversity 
of European cultures, its development gives expression to the very essence 
of the Community. It helps to shape public opinion and to establish 
references for both behaviour and consumption. 
The growth forecasts are based above all on the development of television 
services, whose volume in terms of broadcasting time will increase by more 
than 50% over the next five years. In addition to television stations, new 
audiovisual services will come into being thanks to the proliferation of 
techniques such as video, cable, telematics and other computer 
technologies. 
The audiovisual sector is quite clearly one in which demand is set to grow 
substantially: demand for "programmes" in the broader sense of the terra --
TV programmes, cinema films and miscellaneous audiovisual services -
engendered by new broadcasting, recording and interactive communication 
opportunities and techniques. 
2.2 A MAJOR FR0BLH4: THE MISMATCH BETWEEN SUPFLÏ AND DEMAND 
However, the audiovisual programmes industry is already marked by a 
conspicuous mismatch between supply and demand, with demand far in excess 
of the industry's ability to satisfy it. There is also a danger that the 
gap between supply and demand may grow considerably wider. 
There are many reasons for this: 
- The circuits for the distribution/broadcasting of audiovisual works on 
the European scale are inadequate. 
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Nearly 90% of European products - all types together - never go beyond 
the frontiers of their country of origin. Consequently, better 
circulation of such products throughout the Community market would help 
substantially to meet the shortfall in the supply of audiovisual 
products for television, video and cinema. 
- Production capacities are fragile because they are limited by the 
excessively narrow structures of the national industries. The national 
limitations are reflected by the small size of firms, investments and 
markets. The inadequate profitability level of national products is 
aggravated by the constant rise in production costs. This rise is 
especially felt in the field of fiction, i.e. films for cinema and 
television series. And yet fiction is an essential area of audiovisual 
activity. It is the public's favourite type of product and the type on 
which the media base their appeal on the European and world markets and 
will be central to the development of the industry in years to come. 
- The European industry has hitherto been unable to develop a "second 
market" for its products. The creation of such a i^broadcasting market 
should open the way for the further exploitation of large stocks of 
programmes which, at the present time, cannot be used profitably owing 
to problems concerning royalties, archive management or simply absence 
of catalogues. 
- Lastly, from the point of view of investment, the audiovisual sector is 
regarded by the financial world as a high-risk sector, precisely because 
of the limitations of the production and distribution markets. There 
are too few investors willing to operate on the basis of cross-frontier 
distribution of risks. 
2.3 IMPORTANT OBSERVATION: THE AOCHaTOAIION OF "NON-EUROPEAN" SUPPLY 
The European audiovisual sector is in a particularly difficult situation on 
on world markets. This situation is likely to get worse as the gap between 
supply and demand in Europe widens. 
The effects of the world context on the audiovisual industry in Europe are 
already numerous and there is a danger that this industry will become 
trapped in a vicious circle of underdevelopment. Same examples: 
- Companies of American origin control, on average, 60% of film 
distribution in Europe (over 90% in some countries such as the United 
Kingdom); 
- 40% of European vidéocassette distribution networks are in the hands of 
groups of non-European origin; 
- In 1988 Europe bought 700 million dollars' worth of television 
programmes from the United States, mainly in the fiction category; 
- Out of 11 000 hours of animated cartoon programmes broadcast by 
television stations in the European Community in 1989, only 350 were of 
domestic origin. The bulk of these programmes were supplied by 
Japan (60%). 
The European industry by contrast, because its ranks are divided, hardly 
manages to gain a foothold on the world market. In the Onlted States and 
Japan it accounts for barely 2% of audiovisual and cinema programmes. 
2.4 A SOUJTION: THE CREATION OF OQNMQNIT? COOPERATION SIKJCIUKES 
The fact that the European audiovisual sector has grown up in national 
frameworks means that its weaknesses are essentially structural in nature: 
they lie in the fragmentation of the market and the dispersion of the 
industries. Only cooperation between economic and cultural forces can lead 
to the creation of a European audiovisual area, which is the sine qua non 
for a strong industrial structure. 
Cooperation will have to develop in all sectors along the whole length of 
the creatlon-finaiKdJig-proteotion-oUstrlbutlon chain, through the 
establishment of company networks and common infrastructures, by means of 
which the potential of the single market in the audiovisual sector can be 
turned to advantage: 
- The audiovisual sector is made up of a large number of small and 
medium-sized firms. These small independent production companies must 
be encouraged to set up co-production, co-financing and commercial 
promotion structures suited to the requirements of both the European and 
the international markets. 
- At the same time, distributor networks will have to be set up to remedy 
the lack of "multinational" structures for the circulation of films in 
the Community and elsewhere in the world. In particular, these networks 
must be given incentive mechanisms by means of which the language 
barrier, which is the major obstacle to European and worldwide 
distribution, can be overcome. These mechanisms will be vital for the 
productions of countries with less widely spoken languages. 
- The creation of a second market by increasing the cross-frontier 
profitability of programmes is a necessary complement to the promotion 
of independent production and distribution. The difficult problems 
connected, in particular, with the exploitation of archives can be 
solved only through European-scale cooperation networks. 
- Lastly, the European audiovisual sector will have to take advantage of 
new techniques for production and broadoasting/d i stribution. In a 
rapidly changing context, every opportunity offered by technological 
development must be seized in order to encourage the expansion of the 
European audiovisual market. Furthermore, the cost of technological 
innovation and of its uses in programmes warrants the pooling of 
resources in the context of cross-frontier exploitation structures. 
- In general terms, in addition to the establishment of company networks, 
capital will have to be raised by means of new systems for the 
involvement of investors and the distribution of risks both over the 
sector itself and at Comraunity level. 
An overall and coherent action programme is needed to meet the challenges 
posed by the future of the European programme industry. 
-4-
Strengthening the audiovisual capacity of Europe will involve structural 
changes on the scale of the Single Market. This is a task of Community 
magnitude requiring coordinated efforts on the part of the public 
authorities in the Member States and at Community level. A Community 
programme within which each party would play its own role is an imperative 
requirement for the development of the necessary instruments for 
cross-frontier cooperation and in order to set up the incentive nechanisms 
needed to give structure to the European audiovisual area. 
3. AN ACTION rirraAMMR THE «nre wirmrK OR TH* HTTOTIPRAW AnnwTsnAT. 
IMUUfcTlKf 
The proposed action programme is based on the desire to improve the 
economic context of the audiovisual industries in readiness for the advent 
of the Single Market. To achieve this objective, incentive measures of a 
practical nature will be required in order to generate Community synergies 
in each sector. These measures will have to be set into a coherent 
programme which takes account of the complex nature of the" audiovisual 
sector and its specific mechanisms and which is designed to exploit the 
wealth and diversity of European cultures. 
Before presenting a definitive programme, the Commission was determined to 
make a pragmatic evaluation of the iiistruments needed for a development 
strategy. After consulting a wide range of professional circles, the 
Commission therefore launched pilot experiments intended to gauge the 
appropriateness and effectiveness of a number of economic incentives for 
the audiovisual sector. On the basis of the analysis of these experiments, 
a set of realistic proposals can now drawn up finely tailored to the 
requirements of the industry and the market 
3.1 WHAT THE COMMUNITY HAS DONE SO PAR: THE MEDIA PHOT PHASE 
The pilot projects have been grouped together under the heading "MEDIA" 
(Measures to Encourage the Development of ..the Audiovisual Industry). 
The MEDIA initiatives were designed to explore possible ways of providing 
economic support for the European cinema and television industry 
(cf "Action programme for the European audiovisual media products 
industry" 0GM(86)255 final of 26 April 1986) 
In Parliament, MEDIA is one of the "absolute priorities" of the Committee 
on Youth, Culture, the Media and Sport (PE 107.501/FIN). On the basis of a 
report submitted by Mr G Papapietro, in 1988 the Committee adopted a 
resolution in favour of its development (doc A2-135/88 of 1.7.88). 
This development is now a matter for a Council decision. During the 1990 
budgetary procedure, the Commission undertook to present the Council with a 
proposal for a decision for the continuation of the MEDIA measures from 
1991 onwards. To honour this pledge, the Commission is preparing to bring 
the experimental phase of MEDIA to a close; it intends to move on to the 
principal phase in the context of a Community action programme designed to 
operate synergetically with Audiovisual EUREKA, thereby answering the call 
made to this effect by the Strasbourg European Council. 
-5-
The action programme is the culmination of a coherent series of initiatives 
consisting of three phases: 
- Consultation of Industry phase (1987) 
This, the first consultation exercise on such a scale carried out with 
the audiovisual industry in Europe, lasted a year and involved more than 
2 000 representatives of the professions involved. It was accompanied 
by in-depth market studies in the production and distribution sectors. 
- Pilot experiment phase (1980-90) 
On the basis of the consultations and studies, some ten pilot projects 
were set up during 1988, which now involve more than 10 000 people and 
firms in the Community. 
- Main pha.qe Oreglmlng ta 1991) 
On the basis of the pilot experiments, the Community action programme 
will have to ensure that the achievements and guidelines emerging from 
the trial phase bear fruit on a significant scale, and are supplemented 
where necessary by means of collaboration arrangements with Audiovisual 
EUREKA. 
In proposing the action programme, the Commission refers to the opinions 
expressed by European professional circles meeting at the Audiovisual 
Conference held in Paris last October. The audiovisual professionals 
recognized the great illustrative value of the projects of the pilot phase, 
which, they consider, must be developed in liaison with Audiovisual EUREKA. 
It is proposed that this dialogue with the professionals should be 
continued and intensified by setting up new mechanisms for consultation 
providing an appropriate framework for their involvement in the 
implementation of the new programme. 
Further to the analysis carried out at the audiovisual conference, these 
projects were evaluated by an independent group of experts. The Commission 
has carefully examined the report produced by the experts and taken due 
account of it in its proposal for a programme. 
It is proposed that, in implementing the action programme, the Commission 
should be assisted by an advisory committee consisting of representatives 
of the Member States. This committee, as well as the new mechanism for the 
consultation of professional circles set up by the Commission, will have an 
important role to play, especially in ensuring optimum transparency in the 
management of the programme and appropriate publicity for the various 
projects (thus partly answering the concerns expressed in this connection 
in the review report, particularly points 1.3 and 2). 
It is also proposed that, as suggested in the review report (point 2.1.5), 
the implementation of the programme should be the subject of a new 
evaluation two years after it starts. It is to be noted that the analysis 
of the sector to which the report refers is an ongoing exercise being 
carried out both by the Commission and in other contexts (e.g. Audiovisual 
EUREKA, with the establishment of the European Audiovisual Observatory). 
3.2 PRINCIPLES OF OÛMMnNITÏ ACTION 
The programme proposed by the Commission sets out to improve the 
environment of audiovisual businesses without directly intervening in 
production. The measures will be located upstream and downstream of 
audiovisual production along the whole length of the industrial chain: 
2) 
-6-
they will concern training, pre-production, the inultilingualism of 
programmes, the use of new technologies, distribution moohanisms and 
commercial promotion, the creation of a "second market" based on the 
exploitation of archives, and the improvement of the financing framework 
for the audiovisual sector. 
The effect of all these measures will be to establish the conditions for a 
Community programme. This will: 
- contribute to the completion and operation of a substantial part of the 
common market in services; 
- aim to bring about the departitioning of the national industries by 
creating cross-frontier cooperation networks; 
- help find a balance between countries of different sizes by seeking to 
safeguard their identities; 
- form a coherent set of activities, whose effectiveness will derive from 
Community dimension; 
- be based to a large extent on the financing of measures by the 
programmes industry. 
3.2.1. ffîntliTyitlTTg to tfofi flfftflpletion and operation of ft ffltfftTfrffltlfrl PffiTt 
The action programme will seek to respond to the Community's priority 
objective by endeavouring to produce the "dimension effect" of the new 
economic area in the programmes industries : 
- by strengthening the national industries through the distribution of 
their products on a Qammunity scale to a potential audience of 
320 million people; 
- by establishing arrangements for cooperation between these industries 
based on increased production and distribution capacities on the 
international market. 
The pilot experiments carried out under the MEDIA banner have shown that 
the economic approach brings out the best from the capacities for original 
programme production in the programme industries. They tend to show that, 
if appropriate stimulants are provided, vast markets can be opened up in 
sectors long regarded as uneconomic because they were based on what were 
termed "cultural" industries. It is now becoming clear that the products 
of these industries can reveal considerable commercial potential in a 
"departitioned" economic area. 
3.2.2. Départi tinning of th* yvrtinivLi marfrgtfi ^ f*reatian of cross-
This will be based on a simple mechanism, the effectiveness of which has 
been shown by pilot experiments: the linking up of the economic and 
cultural operators in the programmes industry to form a network. 
The cross-frontier cooperation networks provide effective solutions to the 
major structural problem of the European audiovisual sector, which lies in 
the fragmentation and dispersion of the industries. The effectiveness of 
these networks lies in their potential for "synergy", the effect of which 
is not merely to pool but actually increase the potential of the partners. 
-7-
The action programme will continue to develop a "networks policy" as 
regards both companies and capital: 
- by establishing and extending networks of companies in the form of 
Community cooperation and exchange federations; 
- by raising capital by means of new financial engineering techniques in 
the audiovisual sector. 
As in the past, the coordination centres of these networks will be 
decentralized in the Member States. However, in order to respond to the 
criticism set out in point 12 (penultimate paragraph) of the review report, 
a better geographical coverage of the Ctammunity will be ensured. 
priority for f^ll. fin*? 
In setting up enterprise networks, the programme will focus above all on 
small and medium-sized firms, which form the living fabric of the bulk of 
the European audiovisual industry and the importance of which will tend to 
increase in future. Each of the networks will be organized in relation to 
a specific project managed by professional associations set up for the 
purpose and operating in different countries. Same 10 000 people and firms 
are already involved in the projects being conducted in the experimental 
phase of the MEDIA programme. 
Organizing the audiovisual sector in federations of small firms will, as it 
were, make it possible to restructure the market from the ground up by 
giving birth to a new type of "multinational group". These groups may 
remedy the absence or inadequacy of large industrial companies in key areas 
of the audiovisual sector, for example in film distribution or the animated 
cartoon sector. 
3.2.4. filing t**» rtfflt bfilttyra W^^mj "famuli" «rid "l*rgg« ;)^frhriœ 
By guaranteeing solidarity between countries and markets of different sizes 
the existing cooperation networks, through their density and cohesion, are 
an important factor for the harmonious expansion of the European market. 
The scope of the networks makes it possible to overcome the division 
between "small" and "large" and to carry out "balancing operations" in 
favour of the less widespread cultures and languages in Europe. 
The desire to ensure such a balance will be evident in all the projects 
contained in the action programme. It will take the form of incentive 
mechanisms taking account of the particular difficulties which certain 
national industries encounter in penetrating the European market. 
3.2.5. T«iry*ri^g «. ryihgrent set of complementary measures, whose specific 
valTje lies In Ifte. Community dimension 
The networks set up will be as extensive as possible in order to produce 
effects of scale and exploit the potential for synergy by covering all the 
countries of the Coraraunity. It is this Community scope which will 
guarantee their impact, giving them a specific value impossible to achieve 
on narrower markets. 
Since the problems of the audiovisual industry can only be solved through 
cooperation at Community level, the action programme will not therefore 
take the place of national initiatives but will play a subsidiary role in 
relation to them. 
-&-
Furthermore, the networks will be complementary or "interactive" in nature. 
They are already combined within a cohérent experimental framework which 
encompasses all the functions of the audiovisual industry. It is in this 
coherence of the measures that the specific value of the Ctammunlty-scale 
programme will lie. It would serve little purpose to increase the number 
of isolated, one-off projects with no functional links. Since all the 
different areas of the audiovisual sector are interdependent, an overall 
approach must be adopted involving a set of complementary initiatives. 
3.2.6. IifM^-srale recourse tn mm***, firmnn fnr -hhft pmgPftmmflR industry 
The programme does not propose a system of subsidies: its basic principle 
consists in injecting seed capital into the industry so as to attract 
additional finance from private investors, professional organizations and 
various promotion bodies. 
The power of attraction of the money advanced for the pilot experiments in 
progress is considerable. At the end of 1989, the experiments launched 
under the MEDIA programme had a total value of around ECU 40 million 
compared with an initial outlay of ECU 13.5 million. This figure can be 
expected to double in the course of 1990. 
The action programme sets out above all to stimulate the market: no 
project will receive a financial contribution of more than 50% of its cost, 
the aim being to limit funding to 30%. 
Furthermore, the amounts assigned to the pilot projects have hitherto been 
allocated in the form of loans repayable to the bodies responsible for 
managing the project and are intended to be reinvested. These mechanisms, 
which will continue to be applied during the main phase, should enable the 
projects to become self-sufficient after a few years thanks to the creation 
of their own capacity to generate finance (see review report, points 1.2 
and 2.1.2). This mechanism is already in operation as regards the pilot 
experiments; initial returns on investment confirm the economic validity 
of the measures undertaken and justify hopes for their viability in the 
long run. 
The large sums raised in a very short time are a pointer to the enormous 
potential which can be harnessed for the development of the audiovisual 
sector in the European Community. This potential will grow further through 
the extension of initiatives beyond the frontiers of the Twelve, as already 
shown by the participation of Switzerland and Austria in certain projects. 
The involvement of new non-Community partners - particularly in the 
Audiovisual EUKQCA context - will serve to increase the potential for 
synergy and make the European industries more competitive on the world 
market (see review report, point 2.1.3). 
However, the resources available to the MEDIA programme in its pilot phase 
were very limited compared with the requirements of the single audiovisual 
market. In its main phase, the action programme will therefore have to be 
endowed with far more substantial means if it is to have any significant 
impact on that market. The new financial resources will have to be 
modulated over time: their curve will have to rise in the early years 
before declining as the projects become self-financing (see review report, 
points 2.1.1 and 2.1.2). 
- 9 -
3.3 LINES OF ACTION 
The lines of action proposed for implementing the programme take account of 
the lessons learnt from pilot projects and consultations by MEDIA, the 
proposals made by the Audiovisual Conference and the recommendations of the 
Group of Experts set up to assess the results of the pilot stage. 
The action is to be taken both before and after actual production at all 
stages of the production chain, but will not involve the direct financing 
of specific works. The object is to create a climate which will help the 
development of firms by allowing incentives to be offered and cooperation 
networks to be set up in order to compensate for the fragmentation of 
markets and the dispersion of the industry. The programme is not designed 
to provide a framework for direct production subsidies. This approach was 
substantiated by the review report (point 1.3). However, in line with the 
report's recommendations, implementation of the main phase of the programme 
will take account of the need to consider the production chain as a whole 
whose links are becoming increasingly interdependent. 
Four sectors have been considered: distribution/promotion, 
"periproduction" (or production environment), the financing framework and 
training. 
3.3.1. Mgnha.-ni.care for encouraging ^IfytTlbntjnn anfl commercial promotion 
Activities on this front are priorities with an eye to maximum exploitation 
of the potential of the single market. The cn\rculation of European 
productions is hampered both by the language barrier and the partitioning 
of national markets and by the inadequate efforts deployed in distribution 
and cranraercial promotion. 
3.3.1.1. Film distribution in cinemas 
80% of European films go no farther than the frontiers of their country of 
origin, while an average of 60% of film distribution circuits in Europe 
(over 90% in some countries like the United Kingdom) are controlled by 
companies of American origin. Only cooperation between European 
distributors will enable them to send films across frontiers and so attempt 
to create a single cinema-film market. 
- An initial pilot experiment has been conducted: it was mounted by EFDO 
(European Film Distribution office), in support of transnational 
distribution of European films in cinemas. It demonstrated that the 
advent of the single market is boosting the profitability of films and 
using creative potential to advantage. Run by producers and 
distributors, EFDO is helping to set up co-distribution networks by 
fostering cooperation between cxanpanies which were previously operating 
in isolation on their national territory. EFDO grants distributors 
advances against receipts of between 50% and 100% of the costs of 
dubbing/subtitling, copymaking and promoting European films, provided 
these are co-distributed in at least three countries. Priority is given 
to films presented by the largest number of distributors of various 
countries by means of a points system which favours films originating in 
the small countries and their film distributors. 
- 10 -
Since EFDO started up in November 1988, 25 films have featured in 
107 launchings in 13 countries (the Community countries and 
Switzerland). The number of tickets sold to see these films in cinemas 
will soon reach 5 million. Box-office receipts are enabling 
distributors to start paying back EFDO's advances (more than 10% by way 
of contribution to recapitalization). These sums are ploughed back into 
the launching of other films. 
- The Twelve produce over 500 full-length films a year, hut over 80% of 
these films never leave their country of origin. To have any 
significant impact on the Community market, incentives to cross-frontier 
distribution should extend to at least 20% of this output, i.e. to a 
hundred or so films. Stimulating tije market, by strengthening the 
network of European distributors, will also have a positive effect on 
the circulation of films not directly supported by the system. 
- In the pilot stage EFDO confined itself to promoting works which cost 
less than ECU 2 250 000 to produce (i.e. 80% of European output). To 
promote better circulation of films costing more than that (which are 
increasing in number because of the proliferation of co-productions and 
rising costs) the support system will have to be extended to cover the 
distribution of films costing between ECU 2 250 000 and ECU 4 500 000 
(see review report, points 2.2.1 and 3). 
- A special effort must be made for European film promotion campaigns 
outside the Community in order to boost their distribution and their 
international competitiveness (offices to promote European film and 
television programmes, particularly in the United States and Japan, 
group presence at festivals and fairs) (see review report, point 3). 
Lastly, the EFDO pilot project has confirmed that, to be fully effective, 
the distribution of European films calls for an enhancement of the 
film-projection sectors, i.e. the cinema network/csircuit. Measures to 
promote this sector will be developed so as to promote the programming of 
European films. 
3.3.1.2. Distribution in vidéocassettes and on television 
A growing proportion of film receipts is now accruing from their screening 
as vidéocassettes, although this market represents a volume of only 
ECU 3 billion compared with ECU 7 billion in the US. European films are 
very much under-represented on these circuits. That is why a series of 
measures must be envisaged in addition to the support for cinema 
distribution: 
- The EVE (European Video Area) pilot project has devised a scheme of 
advances against receipts to promote the cross-frontier issue and 
circulation of European works, based on the model tested by EFDO (see 
review report, points 2.2.9 and 11). A maximum advance of 40% of 
issuing, dubbing/subtitling and promotion costs will be earmarked for 
European films not issued on video and distributed by at least three 
issuers in different countries. 
The scheme will be supplemented and reinforced by organizing 
- 11 -
cooperation between existing European public médiathèques and libraries 
to encourage the issue of video films and the constitution of subject 
"collections", particular in the field of documentaries and children's 
films. 
- The circulation of European films by the television channels is the next 
stage in ensuring optimum exploitation and a growing source of revenue, 
in view of the increasing number of competing distributors. Some 
measures seeking to boost the proportion of European films in 
circulation have already been tested and will be strengthened (see 
below 3.3.1.3.), but additional measures are needed, particularly to 
promote independent production. 
3.3.1.3. Support for mu1t.111ngua11sm in television programmes 
Multilingual ism is one of the basic requisites for the circulation of 
audiovisual production. The need to develop it will be even greater with 
the growth of direct satellite broadcasting, which will make it possible 
for each programme to be available in several language versions over 
extensive geographical areas, and even in all the countries of Europe (see 
review report, points 2.2.8 and 10). 
- The BABEL pilot project (Broadcasting Across the Barriers of European 
Language) has confirmed the substantial needs in the multilingualism 
sector, a key factor in the circulation of European productions. The 
assistance with dubbing or subtitling provided by BABEL is granted by an 
International Committee of experts on multilingualism and production, 
priority being given to works using the less widely spoken languages in 
Europe, to works of fiction (especially those intended for young people, 
including cartons), to pilot TV series and documentaries. 
With limited funds, BABEL has so far managed to support the dubbing or 
subtitling of 52 television programmes and series from 13 countries for 
102 transmissions in several languages: 32 of these programmes 
originate in "small countries". 
- Given more substantial funds (with, as for other incentive schemes, a 
scheme of advances against receipts for "sound" postproduction of 
programmes), BABEL will have to stimulate circulation more effectively 
and thus boost the profitability of European products designed for 
television, especially those made by independent producers. 
- BABEL must also support the development of multilingual broadcasts, 
including the provision of simultaneous interpreting in television 
discussion programmes, particularly in the field of information, 
training and culture to affirm European identity and benefit from the 
diversity of its constituents ("Euronews" project; broadcasts of the 
Seven; programmes on Olympus, ... ). 
3.3.1.4. Development of the independent productions market 
All in all, almost 90% of European television productions remain within 
their country of origin. Better circulation of existing productions 
- 12 -
throughout the Community market would, however, help to make up the deficit 
in audiovisual supply. The marketing of these productions is an essential 
stage in their distribution. 
- EURO-AIM (European Association for an Independent Producers market), set 
up in the MEDIA pilot project, organizes grouped producers' attendance 
at international, media trade fairs, offers guidance on the presentation 
of films and contacts with buyers, and facilitates access for its 
members to productions available through its data base. Presence in 
EURO-AIM's stands on special financial terms is intended first and 
foremost for producers who have not previously had access to these 
The services offered to independent producers by EURO-AIM in the pilot 
stage have confirmed that this is the right approach. For an investment 
of ECU 1.5 million during MEDIA'S trial period more than a thousand, 
production companies were promoted at seven major international fairs, 
achieving a turnover of ECU 20 million. 
This volume must be increased 
- by highlighting the profile, promotion and effectiveness of the European 
presence on the major markets and by featuring particular sectors of 
production (archives, documentaries, youth productions, etc. ) ; 
- by developing these promotional activities on non-Community markets to 
stimulate sales of European productions, notably in North America and 
Japan, in conjunction with the activities to promote the European cinema 
(see above); 
- by developing the services (legal and marketing assistance; contacts 
with buyers; promotion guidance; coordination of co-productions) 
available to small production firms, outside the fairs; 
- by expanding the EURO-AIM data base to cover all the parameters of the 
independent production market (producers and buyers, rates, available 
productions, planned co-productions, etc.) and by facilitating use of 
the data base by setting up a decentralized network of access points. 
These services should continue to be offered at reduced rates during the 
first two years of the programme. The possibility of charging for them at 
cost price should then be considered (see review report, points 2.2.7 
and 9). 
3.3.2. M^nhani.cms to improve product.inn ppTYiitinnfi 
The discussions conducted before the launching of the MEDIA pilot phase, 
like the Audiovisual Conference, emphasized the quantitative deficit of 
European production. To help make up the deficit, the effort of the action 
programme will focus on improving production conditions, both before and 
after the programmes are actually made. This will facilitate the 
development of "preproduction",* rationalization of infrastructures, use 
Which is, in a manner of speaking, the equivalent in audiovisual terms 
of "research and development". 
- 13 -
of advance technologies, use of programme stocks for the creation of a 
second market and, more generally, the conditions for financing production 
and distribution. 
3.3.2.1. Developing pre-production (fUjm and dooumentaries) 
Fiction is the type of work for which public demand is greatest and is the 
product most sought after by distributors, in Europe and throughout the 
world. It constitutes a major commercial prize. A large variety of 
pre-production material containing story lines well suited to the 
requirements of a transnational audience must be available to attract the 
essential investments by financial institutions and so expand European 
production capacity and competitiveness. 
- The pilot project of the European Script Fund, which examined a thousand 
files and backed a hundred or so pre-production plans, offers a sound 
basis for development. SCRIPT set up a Steering Committee consisting of 
experienced professionals from each of the twelve tanmunity countries in 
order to organize and supervise the selection of fiction scripts to be 
developed up to the production stage. The scripts approved by an 
executive panel assisted by a network of readers and consultants 
throughout Europe received loans averaging 50% of the screenplay and 
pre-production costs invested by the producers, directors and writers. 
- In order to reach a significant threshold with a real impact on 
production in Europe, SCRIPT'S funding capacity must be at least doubled 
and backed by specialized professional services so that projects can be 
tailored more closely to market requirements (see review report, 
points 2.2.2 and 4). 
To give these projects the best chances of reaching production, SCRIPT 
should offer two additional forms of assistance: 
(i) assistance with screenplay writing ("script monitoring"); 
(ii) assistance with production financing, to facilitate contacts 
between potential associates. 
- The assistance provided for development and the pre-production of 
projects must be extended to production companies offering a set of 
projects. 
- While priority will be given to works of fiction, these measures could 
also be applied to the development of creative documentaries involving 
cooperation between a number of countries. Most of the documentaries 
produced in Europe are of a specifically national cast, which limits 
their potential for screening. 
3.3.2.2. Restructuring the cartoon film industry 
Despite the universally recognized talent of its cartoonists and despite a 
priceless heritage in the art of drawing, Europe is handicapped by its 
cartoon studios' lack of production capacity, in an international 1 y 
expanding market. 11 000 hours of cartoon programmes were broadcast in the 
Community in 1989, whereas only 350 were produced by the domestic industry. 
(3) 
- 14 -
- The networking of European studios, begun during the second pilot phase 
by CARTOON (European Animated Film Association), is the response to the 
problem of the dispersion of production structures, and facilitates the 
production of major, high-quality cartoon series at competitive prices. 
Each network, made up of 3 to 5 studios based in different countries, 
will receive for a maximum of three years an advance against technical 
coordination and management costs. 
- Eventually, some twenty pools will group over 80 studios to develop 
solid production infrastructures and increase the share of the 
international market held by Europeans. This partnership of studios 
should be strengthened by industrializing their working methods, 
harmonizing the materials used and computerizing production techniques. 
It will help to ensure in Europe the volume of activity currently being 
subcontracted to the Asian industries, which represents a turnover of 
over ECU 80 million a year. 
- As with other types of products, the pre-production and production 
stages of pilot films are essential in the making of cartoon films. To 
obtain quality material they demand substantial start-up capital in the 
form of advances against receipts. Up to now, some twenty projects have 
been successfullY completed; the aim is to produce fifty "pilots" a 
year (see review report, points 2.2.4 and 6). 
- In addition, an information system specific to European cartoon-film 
making will be developed: 
by organizing, twice a year, a "CARTOON Forum" attended by 
distributors and studios to match supply to demand, speed up 
co-production of projects and shorten the time taken to put 
together financial packages; 
by developing the data bank on cartoon-film makes and artists, 
available studios and facilities, projects in hand and training 
programmes. 
3.3.2.3. Promoting the use of European new technologies in programme 
production 
The new technologies (infography, digital television, high-definition, 
interactivity) represent a rapidly expanding market. To gain a foothold on 
this market, dominated by the United States and Japan, Europe must group 
its efforts to obtain synergies in research, production and information. 
- To help meet this challenge, in the pilot phase, the "MEDIA Investment 
dub for Advance Technologies applied to the Production of Audiovisual 
Programmes" has brought together industrial companies, communications 
groups and financial institutions to promote the place of audiovisual in 
leading-edge technologies. It represents a "meeting point" for 
exchanging information and providing incentive. Its current members 
are: Thomson Techniques de Communication (F), Philips 
International (NL), PESA Electronica (E), Maxwell Connnunications (UK), 
CDC Participations (Caisse des Depots et Consignations) (F), 
Antenne 2 (F), Radio-Televisione Italiana/RAI (I), Nederlandse 
Ctoroepbedrijf (NL), SBP (I), the Institut National de 
l'Audiovisuel/INA (F), and the Commission. 
- 15 -
A Technical Committee, assisted by a permanent secretariat whose 
operating costs are partly borne by the Community iudget, selects 
innovatory projects concerning audiovisual creation and production 
(generally presented by smaller companies), training and information 
technology. Initial, financing is provided from a fund made up of club 
members' fees and by a matching contribution from the Ccanraunity budget. 
In a second stage the most promising projects from the marketing angle 
are financed solely by their promoters. 
Up to now, the (Hub has handled 60 projects, of which it has supported 
two European-standard HDTV productions, two synthesized image 
3D productions, a European infography and synthesized image training 
programme, an interactive c«nrpact-<lisc production (CD-I) and a 
production by the IMAX-CMNIMAX cinematographic process. 
- As its activity in the pilot phase is still below the critical 
threshold, the (Hub must expand in order to achieve the volume of 
finance which will make it the effective catalyst for a European scheme 
to boost the innovative and creative capacity of European companies 
engaged in the production of audiovisual programmes (see review report, 
points 2.2.5 and 7). 
- In order to put to work the assets represented by Europe's know-how in 
research and development, creation, information and training, the dub 
will issue invitations to tender to promote innovatory projects in 
infography, composite techniques (mixture of real and synthetic images), 
interactive systems and high-definition television. 
In liaison with EURKA and Audiovisual EURKA and with the EEIG 
"Vision 1250", created with Community support and grouping 
industrialists and distributors involved in the development of HDTV, the 
Club must support measures to promote the making of films and programmes 
utilizing European-standard HDTV. It must help with the training of 
professional image-makers in the use of the new equipment. 
3.3.2.4. Creation of a "second market" using archive material 
Although they could be making up the deficit in the supply of European 
programmes, considerable resources are locked away in television and cinema 
archives. These constitute substantial assets, both economicallY and 
culturally. 
- The MAP-TV (Memoiy-Aichives-Pi^grammes) project, supported during 
MEDIA'S pilot phase, has created a network between the archive services 
of European TV ccanpanies, cinema-film libraries and other repositories 
of audiovisual material. It is endeavouring to make use of the 
archives, both for documentary and news productions and for fiction. 
The Community must provide financial support to operate and expand this 
network. 
- Turning the assets of this "memory bank" to advantage by reissuing and 
rebroadcasting works or by using them in the production of new series 
- 16 -
will help to create a genuine "second market" designed to reduce the 
European deficit in production and boost the sector's profitability. 
- All this will necessitate agreements between producers and distributors 
in order to find solutions to the problems of royalties, which often 
hamper the use of archives, and to compile the catalogues required to 
promote them on the market. 
3.3.3. Mftr*umi.caire -hn «rtmn1*-hft flrwifiiftl iTtrertinPrvh JTÏ «Khg «nHrnHsml 
fîeûtox 
The restructuring of the European audiovisual industry, the impetus given 
to carefully prepared projects and the outlets offered by the single market 
must all help to attract new investors to the audiovisual sector. The 
purpose of the action programme will be to study and, by coordinating the 
efforts of the operators and encouraging them to join together on a 
European scale, to develop new financial mechanisms adapted to the sector's 
specific problems. 
whenever it proves essential to mobilize and coax the investors, the 
programme will provide finance to initiate the setting-up of the structures 
which, if need be, can subsequently be developed in liaison with 
Audiovisual EUREKA. The aid. arrangements will be studied according to the 
nature and specific needs of each mechanism, with reference being made to 
the initiatives already launched by the Community, especially in favour of 
small firms and companies developing new technologies. 
In the MEDEA pilot phase, two structures have been developed: a 
risk-capital fund - MEDIA Venture - and a guarantee fund - MEDIA Guarantee. 
The plan is not to renew this form of Community assistance, in line with 
the suggestions of the review report (points 2.2.6 and 8). 
The Commission nevertheless considers that, because of the absolute 
necessity to improve the financial framework of production and 
distribution, appropriate measures must be taken to prompt the 
establishment at European level of other mechanisms, some of which exist 
solely at national level. To this end, the Community's role should mainly 
consist of promoting innovation in the setting-up of new transnational 
investment inechanisms in the audiovisual sector, in establishing new 
networks and in contributing to the "getting together" of professional s 
operating in this field. One example of the type of measure to be applied 
would be the setting-up of a network (creation of an association and a data 
bank) of European suppliers of risk capital operating on the audiovisual 
front or prepared to do so. 
Moreover initiatives in this field may give rise to developments in liaison 
with Audiovisual EUREKA. 
3.3.4. Development of profefyrioml fftlllfi 
The development of the European audiovisual sector depends on the ski 11 and 
proficiency of its operators. The action programme will include many 
activities in this area, which have already been fully tried and tested 
during the MEDIA pilot phase. These activities have one common 
- 17 -
feature: they are all concrete measures involving professionals on the 
job, and are therefore of an essentially pragmatic nature designed to meet 
the practical needs of the market. 
They split into two types: awareness-stimulating and knowhow-transfer 
measures urnr^ to each of the programme's lines of action, and the 
specifically economic training of the "new managers" who will be needed by 
the audiovisual industry operating on the scale of the single market. 
3.3.4.1. Activities linked to the other lines of action 
This bears first and foremost on imiltilingualism, screenplay writing, 
cartoon designing and the new technologies. 
- Multilingualism: BABEL will provide facilities for perfecting the 
skill s for journalists and other audiovisual professionals working in 
multilingual environments; 
- Screenplay writing: SCRIPT is proposing "script doctoring" sessions 
intended to increase the professional ski lis of European screenplay 
writers; 
- Animation: CARTOON will endeavour to promote the transfer of knowhow 
between the cartoonists, studio managers and graphics coordinators who 
will be needed to form the networks of cartoon studios; 
- New technologies: the MEDIA (Hub is developing schemes for the 
initiation of professionals in the use, in producing audiovisual works, 
of new techniques in image synthesis, digital TV, high-definition TV and 
interactive TV. 
Since these activities constitute any integral part of the actions in 
question, it is proposed that part of the overall budget allocation per 
action line be devoted to each of them. 
3.3.4.2. Training of "new managers" to cope with Hie single market 
Special emphasis is laid on an original idea, namely ecîonomic and 
commercial training with an eye to the single market. Hitherto absent from 
cinema and television schools in Europe, this type of pragmatic training is 
central to MEDIA'S activity. It is designed to enable the professionals to 
adapt to the new economic dimension of the European audiovisual area and to 
acquire the management ski lis needed to take full advantage of it. 
From that angle, the action programme must continue, and refine, the 
economic and cx3mmercial training courses for young producers, created by 
"European Audiovisual Entrepreneurs (EAVE) (see review report, points 2.2.3 
and 5). Some 80 producers have so far attended the "Entrepreneurs" 
workshops to develop their production material. Much of this material has 
already been given tangible shape by financing, which has resulted in the 
production of full-length cinema films, television films, documentaries and 
a series of video clips. 
In addition, other training, of varying length and level, must be organized 
as a practical response to the economic and cranmercial problems confronting 
the various audiovisual specialities in an environment stamped with the 
needs of the single market. 
As this training measure, although an integral part of the Programme, is 
not directly linked to the other lines of action, it is proposed that it 
should receive a specific budget allocation. 
- 18 -
3.3.5. fflhgr dflyelopments 
As announced in the Commission communication to the Council and Parliament 
on audiovisual policy, the action programme will, in order to maintain 
flexibility and an open approach, continue to explore new ground with a 
view to adapting to the longer-term trend of the European audiovisual 
sector. 
3.3.5.1. Hew audiovisual services 
The programme can promote the birth, at European level, of new audiovisual 
programme services using new commuMoations technologies (interactive 
communication on videodisc, broadcasting by satellite or in the new cable 
networks). New specialized services, e.g. subject channels, 
particularly in areas such as training, tourism and news, can be tried out. 
The programme will support exchanges of experience and transnational 
cooperation between European suppliers of this type of service. 
3.3.5.2. Audiovisual activities in countries and regions with lesser 
audiovisual capacity or limited language area 
Activities in regions with lesser audiovisual capacity, and in those with a 
limited language area in Europe, will be designed to enhance their 
audiovisual potential and affirm their identity and their assets. 
Moreover, audiovisual development in those regions could have a knock-on 
effect for their other economic activities. Regional development of the 
audiovisual industry may have a positive economic impact on those regions 
and lead to the creation of new and skilled jobs.1 
Measures will be tailored to the specific needs and potential of each area. 
Transregional initiatives will thus group regions of varying levels in 
order to combine assets and promote the transfer of ski lis and 
technologies. 
"Regions with lesser audiovisual capacity" must not be confused with 
"less-favoured regions" in the macrceconomic sense. Regions or 
countries with lesser audiovisual capacity are those where the 
audiovisual sector, either because the market is limited in terms of 
population size or because it belongs to an area using one of the less 
widely spoken languages, and regardless of the level of general economic 
development, is particularly likely, provided certain conditions are 
met, to benefit from the effects of transnational cooperation. The 
programme will seek to satisfy these conditions. 
- 19 -
One possibility will be to support "horizontal" measures involving the 
coproduction of multilingual cross-frontier magazines, programme 
exchanges, vocational training and, especially, the training of managers 
familiar with the characteristics of the countries and regions concerned. 
The favoured instrument will be to form networks of media development 
corporations in regions with either low or high audiovisual capacity in 
order to prompt mutually beneficial cooperation. 
3.3.6. Synffrglffi with Awllovlffirt) fflWRgA 
3.3.6.1. TWo complementary instruments 
Both Community policy and Audiovisual EURKA are pursuing the same general 
objective, namely to boost Europe's audiovisual capacity (see the 
conclusions of the Rhodes and Strasbourg European Councils). Annex 2 of 
the Joint Declaration signed in Paris on 2 October 1989 states that the 
European Community may take part in Audiovisual EUR^A projects, notably 
through its programmes, but that these projects are not designed to replace 
the existing frameworks of cooperation, their objective being rather to 
extend or supplement them as appropriate. In practical terms the Community 
will be involved in two ways: the opening-up of Community projects to 
professionals of non-member countries (on contractual terms to be defined) 
and Community participation in Audiovisual EURKA projects which fit into 
the lines of action described earlier. 
The concept of Community "added-value" will determine Commission action in 
Audiovisual EURHCA. 
The complementarity of the two instruments is facilitated by the difference 
in their nature: 
- The action programme is a coherent set of incentive measures acting 
upstream and downstream of production proper, with an effect of scale 
deriving from the participation of the twelve Community countries; 
- Audiovisual EUREKA offers a host structure (based on the original 
technological EURQCA) for helping professional s to devise and execute 
transnational projects by the multiplication of initiatives, especially 
in the production field., with the flexibility afforded by the 
involvement of private and public partners in varying proportions. 
The specific characteristics of these two instruments can produce synergy 
of two types: 
3.3.6.2. The Community action programme extended to include new partners 
The Community gain will be enhanced by the effects of geographical, 
economic and creative enlargement. 
- 20 -
The professionals of the signatory countries to the Joint Declaration are 
invited to participate in the initiatives of the action programme. 
Accessions will be formalized in agreements between the new non-Camraunity 
participants and those responsible for the project in question within the 
framework of the action programme. The new participants will make a 
financial contribution calculated on the hasts of the operational and 
management costs of the project. 
The action programme is a Community instrument and will be managed by the 
Commission, However, extending it to non-Conraunity participants will give 
it much greater œramercial and economic potential. 
3.3.6.3. The Community as a partner in Audiovisual EURŒA projects 
The Community stands to gain from EURKA projects where the broader 
dimension might have a positive impact on the activities of the audiovisual 
programmes industry in Europe. 
The Community will be able to participate in Audiovisual EURffiA projects 
via its action programme. In each case the arrangements will be specified 
in an agreement. 
Participation will be designed: 
- to increase the overall coherence of the various initiatives of the 
action programme by means of participation in projects which build on 
the measures already undertaken; 
- to generate synergies between projects which, when joined together, 
could have a propulsive effect; 
- to stimulate the independent production sector; 
- to help in creating a second market for the distribution of European 
works; 
- to provide projects with the extra finance they need in order to use and 
derive maximum benefit from the European new technologies applied to 
programmes (notably HDTV); 
- to ensure, by means of support for a project, that the potential of 
regions "with lesser audiovisual capacity" is used to best effect; 
- to contribute to the success of Audiovisual EUREKA in order to attain 
the general objective of boosting Europe's audiovisual capacity. 
The projects which will receive for GDonoraunity support may come under any of 
the programme's lines of action. Such support will be determined by 
reference to the specific features of each project and according to whether 
the Audiovisual EUREKA ijretrument is suited to the objectives. The 
Advisory Committee of Member States' representatives will give its opinion 
on the choice of Audiovisual EUREKA projects to be supported by the 
ODmmunity. 
3.3.6.4. Other forms of participation in Audiovisual EURffiA 
Finally, the toraminity will make a contribution - according to the 
percentage rates agreed within the Coordinators Committee - to the 
operating costs of the Audiovisual EUREKA Secretariat and to the 
preparatory work on the European Audiovisual Observatory (and, if the 
go-ahead is given, to its establishment). 
- 21 -
4. wirTrnre rmraRAmm wrm PBOFESSJICKALS OP TOMTtmnNrre HgQFBAK 
This aspect of the programme is of special importance. Beyond the economic 
development they stimulate, exchanges in the audiovisual field will have a 
decisive political impact on the democratic future of the countries 
concerned and on their cooperation with Ctommunity Europe. The aim is 
therefore to promote, horizontally in all the lines of action of the 
programme, cooperation between "Western" and "Eastern" professionals. 
The synergies with the industries of those countries can not only expand 
the market to the benefit of all concerned, but also boost the production 
potential and creativity of Europe as a whole. The programme will include 
innovatory joint-venture formulas, providing in particular for payment in 
the form of services in view of the lack of financial capacity of the new 
partners. 
For example, 
- on the training side, the operations undertaken within the action 
programme to improve the economic management of the European audiovisual 
industry and to improve knowledge of the market will be particularly 
useful to the professionals from "the East", who will be contending with 
new problems posed by the advent of a mixed economy, open to 
competition. In exchange, the Gammunity professionals could benefit, 
for instance, from the excellent instruction imparted in the Polish and 
Soviet cinema schools; 
- the application of new European technologies will help to impose 
European standards throughout Europe, especially in the field of HDTV; 
- films produced in some of- the countries in question will be eligible for 
the Community schemes of loans to be reimbursed from receipts; 
Community films will be distributed in cinemas and on video circuits in 
those countries; 
- the exchanges of television broadcasts between East and West will help 
to reduce the European production deficit and also strengthen the 
"second market"; 
- the collaboration of cartoon studios, such as the Czechoslovak, 
Yugoslav, Hungarian and other studios in the European studios network 
will help to raise the quality of their products and make them more 
competitive. 
It is proposed that part of the financial allocation earmarked for each 
line of action be devoted to this type of cooperation. The cooperation 
agreements already in existence or under discussion with these countries 
could, provide a framework for such measures. 
5. QQNCU3SJQN 
The Council is requested to endorse the objectives and lines of action 
presented above by adopting the decisions annexed. The first, which 
(4) 
- 22 -
concerns the entire action programme other than the specific training 
measure described in point 3.3.4.2., would be based on Article 235 of the 
EEC Treaty. 
The second, which concerns the specific training measure, would be based on 
Article 128 of the EBC Treaty. 
Article 235 may be used only when the Treaty does not provide elsewhere the 
necessary powers to take action. This is not the case with the training 
measure. However, the Commission underlines the importance it attaches to 
the overall coherence of the programme. It considers the decision 
proposed on the basis of Article 128 as being complementary to the one 
based on Article 235. 
- 23 -
Proposal for a 
COUNCIL DECISION 
concerning the Implementation of an action programme to promote 
the development of the European audiovisual industry (1991-1995) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and In particular Article 235 thereof, 
Having regard to the proposal from the Commission,1 
Having regard to the opinion of the European Parliament,2 
Having regard to the opinion of the Economic and Social Commit tee, 3 
Whereas the Heads of State and Government meeting in the European Council 
in Rhodes on 2 and 3 December 1988 underlined the vital importance of 
stepping up efforts, including cooperation, to develop Europe's audiovisual 
capacity, in matters such as the free movement of programmes, the promotion 
of the European high-definition television system or of a policy of 
encouraging creativity, production and broadcasting so as to provide an 
opportunity of demonstrating the wealth and diversity of European culture; 
Whereas the Community already possesses certain instruments designed to put 
such a policy into practice; 
Whereas on 3 October 1989 the Council adopted Directive 89/552/EEC on the 
coordination of certain provisions laid down by law, regulation or 
administrative action in Member States concerning the pursuit of television 
broadcasting activities,4 and that Directive contributes to the 
establishment of a large audiovisual market which must benefit both the 
audiovisual Industry and ordinary citizens and which has yet to be 
consolI dated; 
1 OJ 
2 OJ 
3 OJ 
4 OJ No L 298, 17.10.1989, p. 23. 
- 24 -
Whereas on 27 April 1989 the Council adopted Decision 89/337/EEC on high-
definition television,5 
Whereas between 30 September and 2 October 1989 the Commission and the 
French Government Jointly organized the European Audiovisual Conference In 
Paris; whereas the experts attending the meeting stressed the need for 
stronger Community action, particularly to encourage audiovisual creative 
work; 
Whereas the Joint Declaration of 2 October 1989 approved by 26 European 
countries and the Commission established a transnational cooperation 
structure entitled Audiovisual Eureka; 
Whereas the Heads of State and Government meeting in the European Council 
in Strasbourg on 8 and 9 December 1989 indicated that a Community action 
programme following on from the Media (Measures to encourage the 
development of the audiovisual industry) programme should be endowed with 
the necessary financial resources and that the necessary synergy with the 
Audiovisual Eureka initiative should be ensured; 
Whereas on the Council favourably received the Commission 
Communication on audiovisual policy setting out the priority objectives and 
lines of action of a Community policy to provide an overall approach to 
regulatory, technological and industrial questions in the audiovisual 
sector and establishing a timetable for the submission of the specific 
proposals required for its implementation; 
Whereas the development of the industrial aspects of this overall policy 
will have to be based on the experience acquired and the positive results 
achieved by the Commission in applying the pilot phase of the Media 
programme; whereas the evaluation of that phase carried out by the 
Commission and by a group of independent experts has demonstrated the need, 
if Europe's audiovisual capacity is to be expanded, for a longer-term 
programme; 
Whereas, beyond the continuation and further development of the projects 
carried out at the pilot phase, developing new pilot projects may have a 
catalysing effect on areas of the European audiovisual market which have as 
yet not been adequately explored; 
Whereas, to achieve maximum results, Community action must allow for the 
European dimension of the audiovisual market, which also entails taking 
account of the work to be carried out within the framework of Audiovisual 
Eureka; 
Whereas for this purpose encouragement should be given, via the appropriate 
instruments and in the spirit of the Joint Declaration of 2 October 1989, 
to the development of additional links between Community schemes and those 
carried out within the framework of Audiovisual Eureka-, 
5 OJ No L 142, 25.05.1989, p. 1. 
- 25 -
Whereas, as stated in the Joint Declaration of 2 October 1989, Audiovisual 
Eureka projects are not designed as replacements for Community schemes, 
their purpose being, where appropriate, to extend or supplement them; 
Whereas it is Imperative that the European audiovisual industry match 
supply to demand; whereas it must therefore act to prevent further 
fragmentation of the markets and overhaul its production and distribution 
structures, which are too narrow and do not yield an adequate return; 
Whereas, in this context, special attention needs to be given to small and 
medium-sized businesses and to the Community regions with lesser 
audiovisual capacity, when organizing market structures; whereas action 
must therefore be taken to ensure all appropriate coordination with the 
Community Initiatives now under way in these fields-, 
Whereas in the development of the programme-making industry proper regard 
should be had for the different cultural identities of the various 
countries and regions; whereas, in the same spirit, account needs to be 
taken of the position of regions in Europe with less widely spoken 
I anguages; 
Whereas the development of the programme-making industry calls for a 
mastery of new technology and should enable economies of scale to be made; 
Whereas increased use of new forms of European technology, particularly 
high-definition television and in the areas of audiovisual programme 
production and distribution, may help to enhance the value of the 
technologies in question; 
Whereas the response to the cultural, technological and industrial 
challenges generated by evolving communications techniques and the growing 
requirement for audiovisual programmes Is to be found first and foremost in 
the commitment and drive displayed by the professionals; 
Whereas the media professionals and the Member States must be closely 
involved in developments during the main phase of the programme; whereas 
the exchange of information and experience and consultation between the 
various parties involved and the Commission are vital to the task of 
enhancing the effectiveness and overall cohesion of the Community's 
audiovisual policy as a whole; 
Whereas the purpose of the Community's action in this area must not be to 
try to stand in for but to supplement and extend what Is being done by the 
authorities in the Member States; whereas establishing machinery for 
liaison, cooperation and training complements national moves; 
Whereas the primary aim of financial input from the Community must be to 
arouse interest and contributions from additional sources of financing 
supplied by interested parties, thereby having a multiplier effect on the 
development of the audiovisual industry-, 
Whereas measures designed to establish the internal market in stages over a 
- 26 -
period ending on 31 December 1992 need to be adopted; whereas the Internal 
market comprises an area with no Internal frontiers In which freedom of 
movement for goods, people and services is guaranteed; 
Whereas, to attain the objectives of the Community as stipulated in 
Article 2 of the Treaty, it is clearly necessary to promote the European 
audiovisual programme-making industry as part of the operation of the 
single, market ; whereas, since the Treaty makes no provision for specific 
powers for that purpose, it is necessary to rely on Article 235; 
Whereas the estimated requirement in terms of the Community's contribution 
to the proposed programme is for 235 million ECU, to be spread over five 
years from 1991 onwards; whereas the allocations will be determined on the 
basis of the financial perspectives and within the limits of the amounts 
available for each year's budget, 
HAS DECIDED AS FOLLOWS: 
Article 1 
An action programme to promote the development of the European audiovisual 
industry, called "Media", is hereby adopted for a period of five years from 
1 January 1991. 
Article 2 
The aims of the programme shall be as follows: 
- to help establish a European audiovisual area within which Community 
firms will act as a driving force alongside those from other European 
countr les-, 
to stimulate and increase the capacity of European film and audiovisual 
programme makers to supply on competitive terms, with special regard for 
the role and requirements of small and medium-sized businesses, the 
legitimate interests of creators and the position of countries In Europe 
with smaller audiovisual production capacities or less widely spoken 
languages; 
- to step up intra-European exchanges of films and audiovisual programmes 
and, with a view to securing a better return on investment, to make 
maximum use of the various means of distribution which either exist or 
are still to be set up in Europe-, 
- to contribute towards European production and distribution companies 
being able to obtain a larger share of world markets: 
- to promote and enhance the value of the new European communications 
technologies in the production and distribution of audiovisual material; 
- to encourage an overall approach which allows for the interdependence of 
the various audiovisual sectors and ensures that moves undertaken at 
national level complement those undertaken at European level. 
- 27 -
Article 3 
To attain the objectives set out In Article 2, the following measures shall 
be put Into effect In accordance with the procedure laid down In Article 7: 
- the Improvement of mechanisms for the distribution of European 
productions, in particular through the establishment of specialist 
networks, support for multilingualism and market access for independent 
productions; 
- the improvement of the production environment, with particular reference 
to the development of screenplay-writing and pre-production, the 
application of new forms of technology, including high-definition 
television, the development of specific sectors such as animation and 
the creation of a "secondary market", notably by making use of archives; 
- the creation of a climate favourable to the financing of production and 
co-production schemes, particularly by encouraging the setting-up of 
European venture-capital and guarantee-fund networks; 
- the promotion of new audiovisual services, particularly those which use 
new audiovisual techniques for disseminating and transferring 
Informat Ion-, 
- the development of the audiovisual potential of regions with smaller 
production capacity or less widely spoken languages, particularly 
through the establishment of transnational networks of media promotion 
and development agencies; 
the encouragement of cooperation between audiovisual professionals in 
the Member States and other European countries, especially Central and 
Eastern Europe. 
These measures are described in greater detail in Annex I. 
Article 4 
The implementation of the action programme shall also involve Community 
participation in Audiovisual Eureka projects which complement or extend the 
measures described in Article 3 and satisfy the conditions for Community 
involvement set out in Annex II. 
The Community shall also contribute to the operating costs of the 
Audiovisual Eureka Secretariat [and to the setting-up of the European 
Audiovisual Observatory], 
Article 5 
The resources allocated to the measures provided for in the programme shall 
be determined in the framework of the budgetary procedure. 
- 28 -
Article 6 
As a rule, parties to contracts with the Commission for the implementation 
of the measures provided for in Article 3 must provide a substantial 
proportion of the funding, representing at least 50% of their total cost. 
Article 7 
1. The Commission shall be responsible for Implementing the action 
programme. 
2. For the purpose of implementing the action programme the Commission 
shall be assisted by a committee of an advisory nature, consisting of 
the representatives of the Member States and chaired by the 
representative of the Commission. 
The representative of the Commission shall submit to the committee a 
draft of measures to be taken. The committee shall deliver its opinion 
on the draft within a time limit which the chairman may lay down 
according to the urgency of the matter, if necessary by taking a vote. 
The opinion shall be recorded in the minutes; in addition, each Member 
State shall have the right to ask to have his position recorded in the 
minutes. 
The Commission shall take the utmost account of the opinion delivered by 
the committee. It shall inform the committee of the manner in which its 
opinion has been taken into account. 
3. The matters on which the Commission consults the committee shall include 
the fol lowing: 
- priority schemes; 
- the criteria for selecting projects and contractors; 
- the allocation of funding for priorities; 
- financial contributions within the meaning of Article 4; 
- the evaluation of projects; 
- exceptions to Article 6; 
- the evaluation of the programme for the purpose of drawing up the 
report provided for in Article 8. 
- 29 -
Article 8 
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. 
At the expiry of the programme, the Commission, in accordance with the 
procedure laid down in Article 7, shall send a report on the Implementation 
and results of the programme to the European Parliament, the Council and 
the Economic and Social Committee. 
Done at Brussels, For the Council 
The President 
5) 
- 30 -
ANNEX I : Measures 
and Indicative breakdown of costs (ECU million) 
1. Distribution mechanisms 100 
1.1 Distribution of films In cinemas 40 
Significant development of action taken by EFDO (European Film 
Distribution Office) to promote the cross-frontier distribution of 
European films in cinemas; extension of this support system to works 
produced at a cost of up to ECU 4 500 000; 
Measures to promote European films outside the Community (offices for 
the promotion of European films and television programmes, group 
presence at festivals and on fairs); 
Study and implementation of measures to promote the film sector 
(cinemas) -, 
1.2 Distribution on video cassette and television broadcasting 20 
Prolongation of the EVE measure (European Video Area), which is a 
system of advances on receipts to promote the production and cross-
frontier distribution of European works. Extension of the system, by 
creating networks of médiathèques and public libraries to promote the 
output of programmes on video cassette; 
Encouragement for the broadcasting by television stations of 
programmes produced by independent European producers. 
1.3 Support for multilingualism in television programmes 10 
Extension of the BABEL scheme ("Broadcasting Across the Barriers of 
European Language"), to promote the circulation of European products 
designed for television; 
Support for the development of multilingual television stations; 
Undertake with the framework of BABEL, measures for perfecting the 
skills of journalists and other audiovisual professionals working in 
a multilingual environment. 
1.4 Development of markets for independent producers 30 
Intensification of the EURO-AIM scheme, a services structure which 
organizes the group presence of independent producers on 
international markets and gives them advice; it will: 
- 31 -
- ensure a more conspicuous European presence on the major markets; 
- highlight particular sectors of production (archives, 
documentaries, youth interests, etc.); 
- develop promotional activities on non-Community markets-, 
- develop the services available to small producers; 
- computerize the compilation and dissemination of data on 
independent European production. 
2. Improvement of production conditions 90 
2.1 Development of preproductlon 25 
Development of the European SCRIPT Fund (encouragement for the 
development of screenplays and preproductlon) by increasing its 
financing capacity and providing, in addition, professional services 
such as: 
- assistance In the field of script writing; 
- assistance with regard to the financing of production. 
Extension of aid for development and preproductlon to companies 
presenting "packages" of programmes; 
Extending these measures (intended primarily for works of fiction) to 
creative documentaries; 
Developing, within the framework of SCRIPT, the professional skills 
of European screenplay writers, in particular by organising "script 
doctoring" sessions; 
2.2 Restructuring of the animated cartoon industry 25 
Encouragement for the formation of networks of production studios by 
cofinaneing coordination and management costs; ensure that the 
complementary measures for the transfer of know-how between the 
cartoonists, studio managers and graphics coordinators who will be 
needed to form these networks are taken; 
Contributing to the harmonization and computerization of production 
modes and to the industrialization of working methods; 
Support for the production of "pilots" by providing seed capital in 
the form of advances on receipts; 
Development of an information system specific to the European 
animated cartoon industry based on meetings between producers and 
distributors as well as the computerization of professional 
Informat ion. 
- 32 -
2.3 Promotion of the use of new European technologies in the production 
of programmes 25 
Extension of the activities of the MEDIA Investment Club: 
- by increasing the number of Its members, 
- by issuing invitations to tender so as to encourage innovative 
projects, 
- by providing support for measures designed to promote the 
production of films and programmes using the European HDTV standard 
(in liaison with EUREKA-Audlovlsual and EEIG "Vision 1250"). 
- by promoting schemes for the initiation of professionals in the 
use, in the production of audiovisual works, of new techniques in 
Image synthesis, digital TV, high-definition TV and interactive TV. 
2.4 Contribution to the establishment of a "Second Market", using archive 
material 15 
Support for the operation and consolidation of MAP-TV (linking up of 
European archives services); 
Turning this "memory bank" to advantage by reissuing and 
rebroadcasting works or by using them for the production of new 
serles; 
Research into and experimentation with solutions for the problems 
concerning royalties, which hamper the use of archives; 
Production of catalogues to be used for the promotion of archives. 
3. StImulation of financial investment 15 
Encouragement for the establishment and development of structures 
designed to mobilize and stimulate investors (risk-capital fund, 
guarantee fund, investment pools, etc.). 
4. Other measures 30 
Continuing to explore new areas in order to adapt the action 
programme to developments in the European audiovisual sector. For 
example, in the following fields: 
- promotion of new audiovisual programme services using new 
broadcasting technologies (development of experiments in fields 
such as interactive communication, subject channels, etc.); 
- 33 -
- development of potential in Community countries and regions with 
smaller audiovisual capacity or limited language area; 
5. Promotion of cooperation with professional circles In Central 
and Eastern European countries. p.m. 
Part of the financial allocation for each of the lines of action 
(1 to 4) will be devoted to this type of cooperation. 
TOTAL 235 
#' 
- 34 -
ANNEX II 
Community Involvement in Audiovisual EUREKA 
Both Community policy and Audiovisual EUREKA are pursuing the same general 
objective, i.e. to boost Europe's audiovisual capacity In accordance with 
the conclusions of the Rhodes and Strasbourg European Councils. In this 
connection, Annex 2 to the Joint declaration signed in Paris on 
2 October 1989 concerning Audiovisual EUREKA states that the European 
Community may take part in Audiovisual EUREKA projects, particularly 
through Its programmes, but that these projects are not designed to replace 
the existing cooperation frameworks, their objective being rather to extend 
or supplement them as appropriate. In practical terms, the Community will 
be involved in two ways-, the opening-up of Community projects to 
professionals of non-member countries (on contractual terms to be defined) 
and Community involvement in Audiovisual EUREKA projects which fit into the 
lines of action described in Annex 1. 
The concept of Community "added value" will determine Commission action in 
Audiovisual EUREKA. 
The positive complementarity between the Community action programme and 
Audiovisual EUREKA is helped by the difference in their nature: 
The action programme Is a coherent set of incentive measures acting 
upstream and downstream of production proper with an effect of scale 
deriving from the participation of the twelve Community countries-, 
Audiovisual EUREKA offers a host structure (based on the original 
Technological EUREKA) for helping professionals to devise and execute 
transnational projects by the multiplication of initiatives 
especially in the production field, with the flexibility afforded by 
the involvement of private and public partners in varying 
proport ions. 
The specific characteristics of these two instruments can produce synergy 
of two types: 
1. The Community action programme extended to include new partners 
The Community gain will be enhanced by the effects of geographical, 
economic and creative enlargement. 
The professionals of the signatory countries to the "Joint Declaration" are 
invited to participate in the initiatives of the action programme 
Accessions will be formalized in agreements between the new non-Community 
participants and those responsible for the project in question within the 
framework of the action programme. The new participants will make a 
financial contribution calculated on the basis of the operational and 
management costs of the project. 
- 35 -
The action programme is a Community instrument and will be managed by the 
Commission assisted by the Advisory Committee provided for In Article 7. 
However, extending it to non-Community participants will give it much 
greater commercial and economic potential. 
2. The Community as a partner In Audiovisual EUREKA projects 
The Community stands to gain from EUREKA projects, where the broader 
dimension could have a positive impact on the activities of the audiovisual 
programmes Industry In Europe. 
The Community will be able to take part in Audiovisual EUREKA projects via 
its action programme. In each case the arrangements will be specified in 
an agreement. 
Participation will be designed: 
to increase the overall coherence of the various initiatives of the 
action programme by means of participation In projects which build on 
the measures already undertaken; 
to generate synergies between projects which, when Joined together, 
could have a propulsive effect; 
to stimulate the independent production sector; 
to help in creating a second market for the distribution of European 
works; 
to provide projects with the extra finance they need in order to use 
and derive maximum benefit from the European new technologies applied 
to programmes (notably HDTV); 
to ensure, by means of support for a project, that the potential of 
regions "with lesser audiovisual capacity" is used to best effect-, 
to contribute to the success of Audiovisual EUREKA in order to attain 
the general objective of boosting Europe's audiovisual capacity. 
The projects which will receive Community support may come under any of the 
lines of action of the programme described in Article 3. Such support will 
be determined by reference to the specific features of each project and 
according to whether the Audiovisual EUREKA instrument is suited to the 
objectives. The Advisory Committee of Member States' representatives will, 
as provided for in Article 7, give its opinion on the Audiovisual EUREKA 
projects to be supported by the Community. 
3. Other forms of participation in Audiovisual EUREKA. 
The Community will make a contribution - according to the percentage rate 
agreed within the Coordinators' Committee - to the operating costs of the 
Audiovisual EUREKA Secretariat and to the preparatory work for the 
establishment, should this be so decided, of the European Audiovisual 
Observatory. 
- 36 -
Proposal for a 
COUNCIL DECISION 
concerning the implementation of a Community vocational training 
measure in the audiovisual sector 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic Community, 
and In particular Article 128 thereof, 
Having regard to the proposal from the Commission,1 
Having regard to the opinion of the European Parliament,2 
Having regard to the opinion of the Economic and Social Committee,3 
••# 
1 OJ 
2 OJ 
3 OJ 
tVft 
- 37 -
Whereas the Heads of State and Government meeting In the European Council 
In Rhodes on 2 and 3 December 1988 underlined the vital Importance of 
stepping up efforts, including cooperation, to develop Europe's audiovisual 
capacity, In matters such as the free movement of programmes, the promotion 
of the European high-definition television system or of a policy of 
encouraging creativity, production and broadcasting so as to provide an 
opportunity of demonstrating the wealth and diversity of European culture; 
Whereas the Community already possesses certain instruments designed to put 
such a policy into practice; 
Whereas on 3 October 1989 the Council adopted Directive 89/552/EEC on the 
coordination of certain provisions laid down by law, regulation or 
administrative action In Member States concerning the pursuit of television 
broadcasting activities,4 and that Directive contributes to the 
establishment of a large audiovisual market which must benefit both the 
audiovisual industry and ordinary citizens and which has yet to be 
consolidated; 
Whereas between 30 September and 2 October 1989 the Commission and the 
French Government jointly organized the European Audiovisual Conference in 
Paris; whereas the experts attending the meeting stressed the need for 
stronger Community action, particularly in the field of vocational 
training-, 
Whereas the Joint Declaration of 2 October 1989 approved by 26 European 
countries and the Commission established a transnational cooperation 
structure entitled Audiovisual Eureka; 
Whereas the Heads of State and Government meeting in the European Council 
in Strasbourg on 8 and 9 December 1989 indicated that a Community action 
programme following on from the Media (Measures to encourage the 
development of the audiovisual industry) programme should be endowed with 
the necessary financial resources and that the necessary synergy with the 
Audiovisual Eureka initiative should be ensured; 
Whereas on the Council favourably received the Commission 
Communication on audiovisual policy setting out the priority objectives and 
lines of action of a Community policy to provide an overall approach to 
regulatory, technological and industrial questions in the audiovisual 
sector and establishing a timetable for the submission of the specific 
proposals required for its implementation; 
Whereas the development of the industrial aspects of this overall policy 
will have to be based on the experience acquired and the positive results 
achieved by the Commission in applying the pilot phase of the Media 
programme; whereas the evaluation of that phase carried out by the 
Commission and by a group of independent experts has demonstrated the need 
for more transnational cooperation on vocational training in the 
audiovisual sector; 
4 OJ No L 298, 17.10.1989, p. 23. 
- 38 -
Whereas for this purpose encouragement should be given, via the appropriate 
Instruments and In the spirit of the Joint Declaration of 2 October 1989, 
to the development of additional links between Community schemes and those 
carried out within the framework of Audiovisual Eureka relating to 
vocational training; 
Whereas, in this context, special attention needs to be given to small and 
medium-sized businesses and to the Community regions with smaller 
audiovisual capacity, when organizing market structures; whereas action 
must therefore be taken to ensure all appropriate coordination with the 
Community initiatives now under way in these fields; 
Whereas the primary aim of financial input from the Community must be to 
arouse Interest and contributions from additional sources of financing 
supplied by interested parties, thereby having a multiplier effect on the 
development of the audiovisual industry; 
Whereas a measure concerning vocational training needs to be added to the 
other Community measures designed to promote the development of the 
European audiovisual industry; whereas these measures must be conducted in 
para I lei -, 
Whereas the estimated requirement in terms of the Community's contribution 
to the proposed measure is for 15 million ECU, to be spread over five years 
from 1991 onwards; whereas the allocations will be determined on the basis 
of the financial perspectives and within the limits of the amounts 
available for each year's budget, 
HAS DECIDED AS FOLLOWS: 
Article 1 
A Community measure for the development of vocational training in the 
audiovisual programmes industry covering a period of five years from 
1 January 1991 is hereby adopted. 
Article 2 
The aim of the Community measure shall be to help, In particular by 
improving the skills of audiovisual professionals in the Community in 
economic and commercial management, to establish conditions in which 
undertakings in the sector can derive maximum benefit from the dimension 
offered by the single market. 
- 39 -
Article 3 
To attain the objective referred to in Article 2 transnational vocational 
training schemes In economic and commercial management shall be developed 
in the sectors of film and audiovisual programme production and 
distr ibut ion. 
Article 4 
The implementation of the measure may also involve Community participation 
in Audiovisual Eureka projects which complement or extend the measure. 
Article 5 
The resources allocated to the measure shall be determined In the framework 
of the budgetary procedure. 
Article 6 
As a rule, parties to contracts with the Commission for the implementation 
of the measure must provide a substantial proportion of the funding, 
representing at least 50% of their total cost. 
Article 7 
1. The Commission shall be responsible for implementing the measure and for 
ensuring coordination with other Community measures to promote the 
development of the European audiovisual industry. 
2. The Commission shall be assisted by a committee of an advisory nature, 
consisting of the representatives of the Member States and chaired by 
the representative of the Commission. The committee shall be the one 
provided for in Council Decision 90/ /EEC5- to assist the Commission 
in Implementing the action programme to promote the development of the 
European audiovisual industry (1991-1995). 
The representative of the Commission shall submit to the committee a 
draft of measures to be taken. The committee shall deliver its opinion 
on the draft within a time limit which the chairman may lay down 
according to the urgency of the matter, if necessary by taking a vote. 
5. OJ No 
- 40 -
The opinion shall be recorded in the minutes; In addition, each Member 
State shall have the right to ask to have his position recorded In the 
minutes. 
The Commission shall take the utmost account of the opinion delivered by 
the committee. It shall inform the committee of the manner In which its 
opinion has been taken into account. 
3. The matters on which the Commission consults the committee shall include 
the fol lowing: 
- the criteria for selecting contractors; 
- financial contributions within the meaning of Article 4; 
- exceptions to Article 6; 
- the evaluation of the programme for the purpose of drawing up the 
report provided for in Article 8. 
Article 8 
After the measure 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. 
At the expiry of the measure, the Commission, In accordance with the 
procedure laid down in Article 7, shall send a report on the implementation 
and results of the programme to the European Parliament, the Council and 
the Economic and Social Committee. 
Done at Brussels, For the Council 
The President 
~Ll4-
ENCOURAGING EUROPE'S MEDIA INDUSTRY 
A Review of MEDIA 92 
by 
a Committee of Experts appointed 
by the European Commission 
March 19')0 
ENCOURAGING EUROPE'S MEDIA INDUSTRY 
A Review of MEDIA 92 
Preface 
We were invited in January by the European Commission to carry 
out an evaluation of the MEDIA 92 Programme, to be delivertîd by 
the middle of March. This required us to work intensively if 
we were to make what we regarded as the necessary inquiries 
into each of the projects, and the impact of the Programme as a 
whole. 
The Committee held seven formal meetings. In addition, each 
member carried out a number of personal inquiries into the 
impact on users of the various projects. We met the Directors 
of MEDIA 92 on three occasions and the co-ordinators of each 
project at least once. Members of the Committee paid visits to 
projects located in Hamburg and Paris. 
We would like to express to all those concerned with MEDIA 92 
and its projects our appreciation of their co-operation. We 
would also wish to put on record the valuable research and 
drafting assistance we received from Mr Hanno Fry, our 
editorial assistant. 
Sir Ian Trethowan (Chairman) 
Mr Bo Christensen 
Mr Enrique De Las Casas 
Mr Massimo Fichera 
Mr Hans Tijssen 
kl 
TABLE OF CONTENTS 
Preface 
1. Introduction 
1.1. The Role of MEDIA 92 
1.2. MEDIA'S Financing 
1.3. The Committee's View of MEDIA 92's Performance 
2. Summary 
2.1. General Recommendations 
2.2. Specific Recommendations 
3. EFDO 
4. European Script Fund 
5. EAVE 
6. CARTOON 
7. MEDIA INVESTMENT CLUB 
8. MEDIA VENTURE 
9. EURO-AIM 
10. BABEL 
11. EVE 
12. Comments On Matters Outside The Immediate Remit 
13. Epilogue 
M 
MEDIA 92 REPORT 
1. Introduction 
The European film and television industries reflect both the 
benefits and drawback's of the Community's diversity - a rich 
and varied creative and cultural tradition, but a fragmented 
distribution system and a lack of a common language. More 
films are made each year in Europe than in the United States, 
and many win international awards, but 80% of them never cross 
the frontiers of their country of origin. 
The Community has affirmed its intention to take positive 
action to foster a distinctive European audio-visual industry, 
most recently at the Strasbourg summit, and in the Commission's 
statement to the Council of Ministers which proposes an action 
programme. 
From our own individual experiences, we can say that the 
Community's positive approach has been a strong encouragement 
to the European film and television industries. The crucial 
role played by television in recent events in Eastern Europe 
has provided a timely reminder of the unique power of the 
media, and of the fact that any society must be actively 
concerned in ensuring that :.ts audio-visual industries develop 
beneficently, and provide a true and distinctive reflection of 
the peoples it serves. 
1.1. The Role of MEDIA 92 
The MEDIA 92 Programme was «et up to try and create more 
co-operation in the European audio-visual industry, (cf.l 
below). Even the longest-running of its nine projects is still 
in its infancy, but it is already clear that MEDIA has 
1. Programme d'action en faveur àe. la production 
audiovisuelle européenne, cormriinication de la Commission au 
Conseil, COM (06) 255 final 
-</i' 
demonstrated the potential to create the coherence and 
co-ordination which the European film and television industry 
needs so critically, and which the Commission seeks. 
Through MEDIA 92, the Community can try to ensure that, as its 
economic and political initiatives draw closer together, its 
constituent national and regional groupings are encouraged to 
maintain their individuality and diversity, while at the same 
time contributing to a strong and distinctive European identity. 
Film and television are where culture and economics cross. At 
present the European industry is strong in creative talent and 
professional skills, but it is relatively weak economically. 
Strengthening the media in Europe will strengthen both European 
culture and European economies; both will suffer if some 
strengthening is not implemented. We have no doubt that an 
expanded MEDIA programme wh:.ch pays especial attention to those 
regions and aspects of the Industry which are at present 
relatively weak, is crucial if the European audio-visual 
industry is to provide employment and maintain a distinctive 
European presence on the screens. 
1.2. MEDIA'S Financing 
We attach great importance to the underlying financial 
philosophy of MEDIA 92. It is, in their own words, "not a 
subsidy machine". On the contrary, they would aim, over a five 
years action programme, to bring their operations to financial 
autonomy. With regard to the administrative costs of the MEDIA 
92 projects, these at the moment are usually paid partly by the 
Commission and partly by the host country. We feel that in 
future these should be borne» in their entirety by MEDIA 92, and 
should be regarded as repayable loans. 
With most of the projects, MEDIA 92 offers seed money, which 
has to be matched by money from other, frequently commercial 
sources. Commercial participation is important, alongside^ that 
H 
of public broadcasters. If the European film and television 
industries can evolve more co-operation and co-production, they 
should become more financially viable. 
1.3. The Committee's View of MEDIA 92's Performance 
We shall in our report suggest that some of the projects would 
benefit from increased fundLng by the European Commission, and 
we shall also make a few criticisms of the existing programme 
and suggest some changes. 3ut we have been impressed by the 
efficiency and the realism of the small MEDIA Programme central 
unit and most of the project teams. 
Our review of the MEDIA 92 projects has been largely ad hoc. 
We have made ourselves acquainted with some of the plans 
MEDIA 92 has been developing for an expanded programme but we 
have not been in a position to consider them in any detail. We 
note that many, but not all of the recommendations of the 
Commission's 1986 programme have been implemented; several new 
features have found our explicit approval, e.g. the creation of 
CARTOON. In other cases we have re-emphasised points made in 
the original document but not implemented, e.g. the close 
association between distribution in film, television, and 
video. We have not, however, in the relatively short time 
available to us, made a sysiiematic assessment of the whole area 
We believe that the time has come for MEDIA 92, and indeed 
other European initiatives, to be placed clearly in a wider 
context. We recommend there should be a systematic and 
thorough study of the entire; audiovisual industry to establish 
the specific needs which have to be filled in Europe and to 
co-ordinate the various initiatives aimed at meeting those 
needs. With this as background, and mindful of the rapid 
changes that some of the projects may be expected to undergo, 
we recommend that MEDIA 92 should be assessed again in about 
two years' time. With this we couple the immediate 
-te 
recommendation that all projects should establish targets and 
criteria for assessment. 
Before turning to the separate projects, there is one general 
point we would make. The MEDIA Programme is, we understand, 
precluded from supporting individual productions directly. 
This is justified since the Commission should not itself choose 
programmes. There should ba no restriction, however, on 
support of production by the projects of MEDIA 92. Most film 
and television productions nowadays are based on a financial 
package which includes an agreement under which the 
distributor, for film, or the broadcaster, for television, 
advances a substantial .sum of money to the producer before 
production begins. 
Since the central reason for creating MEDIA 92 is to encourage 
much greater co-operation between the national audiovisual 
industries within the Community, it is essential that the 
relevant projects should be free" to foster co-production based 
on partnerships between producers and distributors. 
One further general point: If expanded MEDIA 92 is to be fully 
effective across the Community, we believe that it should take 
stronger steps to publicise not only the umbrella organisation 
but each individual project. 
k* 
2. SUMMARY 
2.1. General Recommendations 
1. The work of MEDIA 92 should be expanded into a five year 
action plan according to established targets and methods of 
assessment; 
2. All major MEDIA 92 projects should aim to be 
self-financing within that five year term; 
3. Efforts should be. made to harmonise the roles of MEDIA 92 
with those of other European audio-visual projects; 
4. MEDIA 92 should take steps to make its individual 
projects more widely known within the European industry; 
5. The work of MEDIA 92 s;hould be reassessed in two years' 
time, after a systematic and thorough study of the European 
audio-visual industrv as a whole; 
2.2. Specific Recommendations 
1) EFDO should be given a substantial increase in funding. 
Its basic limit to production budgets should be raised to 
3 million ecu and it should take special steps to encourage 
production in very low budget countries; 
2) The European Script Fund should expand substantially, and 
should be given extra -funding to take its approved projects to 
the production stage; 
3) EAVE should be continued, but subject to its courses being 
inter-disciplinary, to consideration of cost effectiveness and 
duplication, and to MEDIA 92 promoting additional 
-^5-
inter-professional advanced training in connection with 
existing film and television institutions; 
4) CARTOON should be given a substantially increased budget, 
and encouraged particularly to form links with Eastern Europe; 
5) The MEDIA INVESTMENT CLUB should continue to be supported, 
but the extent of MEDIA 92's financial involvement should be 
reviewed; 
6) MEDIA VENTURE does not require the continued involvement 
of MEDIA 92; 
7) EURO-AIM should be encouraged, but producers should be 
charged for using its services; 
8) BABEL is potentially a very important project, but 
MEDIA 92 will need to introduce a new and expanded structure; 
9) EVE should be merged with EFDO, or at least work very 
closely with it. 
So 
3. EFDO - European Film Distribution Office 
Considering that so many films are made in Europe and yet not 
distributed, we consider that this is one of the central 
projects of the MEDIA 9-2 Programme. 
Its object is to stimulate the distribution of films with 
budgets below 2.25 million ecu; the Office uses a loan fund of 
2 million ecu and an administrative budget of 0.35 million 
ecu. It has 61 advisory members who pay 100 ecu per annum. It 
makes loans to distributors for one half the budgeted 
distribution costs which include marketing, copies, dubbing 
etc. The criteria for making loans are exclusively 
quantitative. Distributors from 3 different countries must. 
aPPlyr and preference is given to films from countries with low 
production and to countries with low distribution capacity. Of 
the total funds 40 percent are given to films with budgets 
below 0.7 million ecu. Loans are repayable after distributors' 
investment and 30 percent overheads have been covered by box 
office takings. An additional sum of up to 10 percent of the 
loan is also payable if the distributors go into overall profit. 
The project has been operating for 18 months. Loans have been 
made to 107 distributors for 25 films. Six months after the 
first loans had been made the supported films had been seen by 
an audience of 1.3 million. By the present time, the audience 
is estimated at 5 million. Up to the middle of 1989 there had 
been a return cash flow from the distributors of 0.24 million 
ecu. We have been given no later figures. 
The Report of the Assises Européennes de l'Audiovisuel (the: 
Assises) (p 130) acknowledged the action taken by EFDO to 
promote European works within and outside Europe and hoped that 
it would be sustained and strengthened. 
We are convinced that the value of EFDO to the European 
industry has already been established. We recommend that its 
~5<r 
loan fund should be substantially increased so that it can make 
a more significant impact on the distribution of European 
films. The total annual production of films in the Community 
with budgets below 2.25 million ecu is about 500. In the past 
EFDO has had more applicants for loan funds than it could 
satisfy. 
We take the view that EFDO should raise its limit on production 
budgets to 3 million ecu, with the exception of European 
co-productions where a limit of 4 million ecu might be 
suitable. The present limit of 2.25 million ecu is too low for 
many of the films that have some chance of success. However, 
in order to take proper account of the countries where all 
films have a very low production budget, a third category of 
low budget with a corresponding points advantage might be 
introduced. 
We consider that the production of films of European interest 
would be stimulated further by including distribution 
guarantees (presale) in the distributors' budgets for which 
EFDO can make loans. Many distributors are involved in the 
production finance of films. EFDO's loan fund would obviously 
have to be further increased substantially in order to be able 
to assume this function. 
Furthermore, we would point out that distribution deals for 
films nowadays include television and video rights. It seems 
appropriate to us, therefore, that such deals should be 
supported by one rather than several organisations. An 
amalgamation of, or at least a very close formal association 
between, EFDO and EVE therefore seems indicated to us, as well 
as the inclusion of distribution to television channels. 
We support EFDO's intention of opening offices in the United 
States as well as their efforts to include East European 
countries in their organisation. 
-S2 
Finally, we wish to stress the need for EFDO and EURIMAGES to 
come to an agreement regarding their present and future 
activities. As things staid, there is a danger of a 
duplication or competition which may not be in the interest of 
the European public. 
4. European Script Fund 
The object of the European Script Fund is to stimulate the 
preparation of development packages for across-border fiction 
projects. This includes script, production budget, business 
plan etc. A novel method of selection has been developed. 
Judgements are made on the basis of treatments - not of 
scripts - taking into account the characteristics of each 
country. Loans amounting to one half of the development costs 
are awarded to applicants who submit treatments with a strong 
story line, good production potential, and likely appeal to 
European audiences. The Fund has received over 1100 
applications in the first year of operation and has awarded 83 
loans totalling some 1.7 million ecu so far. Loans are 
repayable when production starts plus 15% per annum commission. 
One half of the administration budget of about 0.45 million ecu 
is provided by British industry, the other half by the European 
Commission. Non-EC countries are preparing to join the Find by 
contributing to both administration and loan accounts. 
Switzerland has recently jcined the Fund; Au.stria has applied. 
The Assises gave "unqualified support to the following proposed 
extensions of the Fund: adding the responsibility for 
(creative) documentary productions and arts programmes; 
extending the geographic range to all countries willing to 
contribute, providing essential support to writers, directors 
and producers during script development and pre-production and 
adding responsibility for incentive funding of production 
companies" (p 68). Further, "the initiative of the Fund is 
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considered to have achieved undeniably positive results. Its 
effectiveness can be extended only on the express condition 
that the financial resources are increased. The Fund has 
provided a not inconsiderable launch for screen writing for 
such countries as Portugal, Ireland, Greece and Denmark." 
The Committee welcomes the objects of the Fund; our enquiries 
have shown that its selections have been recognised as wicls 
ranging and realistic. The work of the Fund can only be fully 
evaluated after it has existed for a number of years, but we 
conclude that it is performing a very valuable function in the 
development area of European fiction. In order for the Fund to 
achieve this and in order for it to make sufficient impact on 
the level of quality, and on the range of choice, available to 
investors in European fiction over a period of five years, we 
consider that the Fund should concern itself increasingly with 
bringing the projects it hoj; helped to develop up to the 
production stage. We recommend .that the Fund's financial 
resources should be increased substantially. 
As for the Fund's mode of operation, wc endorse the practice of 
selection by 2 or 3 people backed up by advisors, but recommend 
that there should be a chancie in the selectors every 3 years. 
Amongst the various aspects of fiction already covered by the 
Fund we wish to place specicl emphasis on the development of 
television series and serials, where Europe? is especially weak, 
and on the collective writing of such projects. 
-bh-
5. EAVE - European Audio-visual Entrepreneurs 
This project commenced operations in June 1988. Its object is 
to train entrepreneurs in the audio-visual industry. Using 
national organisers as selectors of applicants it has an intake 
of about 20 participants and 20 observers a year. They tcike 
part in, and observe, respectively the comprehensive review by 
experts of the projects brought by the participants. These 
progressive reviews are held throughout one year at 3 one-week 
residential courses. 
The project has an annual turnover of about 1 million ecu. 
MEDIA 92 contributes 0.325 million ecu, French and Belgian 
ministries and the Brussels film school together about the same 
amount and 0.2 million ecu are contributed by the participants 
and observers. As an extension, business seminars are planned 
in Spain. 
The Assises, on page 130, acknowledged the action taken by EAVE 
and expressed the hope that the initiative will be sustained 
and strengthened. 
We have studied the literature put out by the project and the 
extension of the project proposed quite recently by the ME:DIA 
92 Programme. EAVE argues that its courses are a significant 
addition to the work of the national schools, by making young 
entrepreneurs more familiar with the realities of the market 
place, and encouraging associations between entrepreneurs'* from 
different countries. We support this objective but we see two 
risks: of duplicating work already done effectively in the 
various national film and television schools, and of 
over-specialising, separating creative and managerial 
disciplines. 
MEDIA 92's initiatives should concentrate on teaching media 
professionals how to co-produce in Europe and instructing 
managers who want to become active in the media in the 
-&-
essential characteristics of the industry. We judge there is a 
place for EAVE, provided it brings together all professional 
disciplines, and concentrates its courses on those relatively 
inexperienced in the audio-visual industry. Alongside this, 
MEDIA 92 should help to promote the expansion of advanced 
teaching based on the already existing film and television 
schools combined in the European CILECT. We recommend that the 
cost effectiveness of the- EAVE project should be reviewed, that 
a time-table be developed for making the project 
self-financing, and that MEDIA 92 should take note of the fact 
that the inter-disciplinary nature of this particular project, 
and its geographical spread, require sensitive and effective 
management. 
6. CARTOON 
This project has been operating for 2 years. It is primarily 
designed to encourage European co-operation in the production 
of animation programmes and the industrialisation of studios. 
Two groups of studios have oeen formed, 2 more are about to be 
formed, and several others are in the negotiating stages. 
CARTOON is also helping to develop a European training scheme 
for animators as part of a 3-year emergency plan. Furthermore 
the project helps to develop scripts for animation programmes 
using an adapted form of th«* one used by the European Script 
Fund. The making of pilots is also supported. 
t 
The project has an annual administration budget of 0.25 million 
ecu provided as to 40 percent by the European Commission. The 
cost of encouraging co-operation, - including the preparation 
of a 'technical bible' - has been 0.1 million ecu per annum on 
average from MEDIA 92 funds, far less than the amount invested 
by the studios themselves; the turnover of the 2 newly formed 
groups for current productions is anticipated to amount to a 
total of 38 million ecu in 2 to 3 years. 0.1 million ecu have 
been contributed from MEDIA 92 funds to the training scheme, 
-y* -
about 20 percent of its total cost. About 0.5 million ecu out 
of MEDIA funds has been provided as loans for the development 
of scripts for 23 projects out of 84 applications in 2 years. 
This represents.some 20 percent of the full development costs. 
Scripts are selected .by a committee of five experts. The 
developed scripts are estimated to generate a total production 
budget of 25 million ecu in the next 3 years. In 1990, 0.15 
million ecu will be available from MEDIA 92 as conditional 
loans for making pilots as part of pre-production, representing 
some 25 percent of the cost. 
The Assises expressed support for the work of CARTOON in the 
area of the training of trainers (p 68). 
We are conscious that, on tae one hand, animation lends itself 
admirably to be a pan-European project, and that on the other 
hand, the European industry is particularly weak in this area. 
We are impressed very favourably with the achievements of the 
project so far, and strongly favour its further development. 
We welcome the project's intention to encourage state-of-
the-art technologies in this field. 
We consider that the project is underfunded, not least because 
we feel that in this project, above all, MEDIA 92 can help to 
promote a highly desirable «expansion into eastern Europe, where 
animation has reached a higii artistic and technical standard. 
We recommend therefore that the project should have 
substantially increased funding. 
s*~ 
7. Media Investment Club 
The Media Investment Club of 10 members including MEDIA 92 is 
just over a year old. The other members are industrialists, 
financial establishments, communications groups, and television 
companies. The Club exists to stimulate the use of advanced 
technology in audio-visual productions and it is also concerned 
with training, information, and export in the same area. 
It is intended to recruit- additional members to the Club, the 
medium term aim being to have 50 members, 30 of which will be 
small to medium sized companies. This will make it easier for 
the Club to raise its share of the investment in appropriate 
projects. The Club also intends to become active in initiating 
new projects. 
The Club has an administrative budget of 0.44 million ecu, half 
of which comes from the EC. Its investment budget was about 
0.9 million ecu last year; this year it will be 0.46 million 
ecu. It is intended that MEDIA 92 will continue to match the 
membership fees paid by the other members. Projects are 
selected by a committee of 6 professionals in the fields of 
production, engineering, industry and finance. We recommend 
that someone with editorial experience should be included. 
Applications are judged for innovation, content, and potential 
for earning a profit; projects can be supported only if they 
are sponsored by at least 2 members from different countries. 
Nearly 0.6 million ecu have been spent so far for 7 projects 
out of 76 submitted. The remaining applications were judged 
not to satisfy the conditions of the Club. In 5 of the 
projects in which the Club is looking for a return on 
investment it acted as co-producer. The Club forecasts that 
some of its projects will be outstandingly successful. 
-s 3-
The Club has also subsidised the training of new creators with 
about 0.1 million ecu. 
The new technologies working party of the Assises regarded the 
MEDIA Investment Club as providing the basis for a solid 
experiment. 
We were concerned initially about two aspects of this project: 
1. the relatively small membership fee paid by each of the 
Club's large enterprises; the small sums collected in this way 
cannot affect the development of the technologies. 
2. why, when all the companies involved were quite large, 
MEDIA 9 2 should be needed a:s a member. 
We were persuaded to look a*: the present situation as part of a 
medium term strategy which aims at strengthening the smaller 
and medium sized units of the industry. In this light we have 
accepted that the Club has needed both the larger organisations 
and the initiative and participation of MEDIA 92 for its 
inception, and that it will continue to need the participation 
of MEDIA 92 for reaching its medium term goal. We came to the 
conclusion, on the other hand, that the level of financial 
participation in the future should be reviewed. We were also 
satisfied that the Club represented a useful forum in which 
production and industrial developments could be discussed 
between producers and manufacturers and between different 
levels of industry. 
-S"? 
8. Media Venture 
This scheme is expected to start up in a few months time under 
Luxembourg law and taxation and is not yet fully defined. Its 
capital is expected to be batween 25 and 50 million ecu, v*ith 2 
million ecu coming from MEDIA 92. None of the associates will 
hold more than 10 percent of the capital assets. A number of 
investors were said to have declared their interest in the 
scheme; full claritv regarding individual investors could not 
be reached in the time available to the committee. 
Media Venture will invest primarily in high-budget European 
films and prestige television series with a good commercial 
potential and in their distribution. They will seek to be 
involved in co-productions between European and US producers. 
It is anticipated that the investment will be concentrated on 
works costing at least 7 million ecu to produce. The Committee 
were told that Media Venture» would not be able to buy the 
producers' rights, as they were precluded from doing so if they 
wanted to take advantage of the Luxembourg tax laws. This 
avenue, however, would be available to other financiers. 
Projects will be selected for financing by a subsidiary of 
Media Venture called Media Venture Conseil consisting of 2 or 3 
permanent staff and a network of advisors. 
Studies have been undertaken of all European film and < 
television markets from both the legal and financial aspects. 
The report of these studies has not yet been published but a 
list of the participants has: been supplied. 
The Committee has some difficulty in commenting on a structure 
that is not fully defined. Films budgetted at more than 
7 million ecu should, in our view, stand or fall as commercial 
ventures. MEDIA 92*s participation is relatively small, and we 
-t>Ù~ 
do not believe should be necessary. We recommend that MEDIA 92 
should not continue to be involved in this operation. 
9. EURO-AIM 
Euro-Aim, which has been in operation for 2 years, is a support 
structure providing a range of services to assist independent 
producers in the marketing, promotion, and sales of their 
productions. It facilitates producers' attendance at existing 
media trade fairs by creating large-scale "umbrella" exhibition 
stands. This is complemented by new marketing initiatives and 
by its data bank. Euro-Aim selects the companies it supports, 
giving priority to companies new to markets, less experienced 
companies, and those that aire judged to be original and 
creative. To finance its 1M89 activities, 1989 Euro-Aim 
received 1 million ecu from MEDIA 92 and a total of 2.4 million 
ecu from other public and private sources. Euro-Aim calculate 
that they have assisted European independent producers to sell 
nearly 2000 hours of programmes representing sales of 13 
million ecu. Over 150 buyers - including some from overseas -
have requested searches from the database representing some 
30,000 data sheets being distributed. 
The Assises (p 130) acknowledged the action taken by Euro-Aim 
and expressed the hope that the initiative will be sustained 
and strengthened. / 
Euro-Aim is launching a new database to help European producers 
find European co-producers. Euro-Aim is also starting to offer 
a year-round, free marketing and distribution consulting 
service to European independent producers. 
We consider that Euro-Aim - including its database - is a very 
useful project, which should be encouraged to concentrate on 
small distributors and small countries. The project should be 
supported, and particularly should seek to increase the level 
of effort devoted to selection and to follow-up the contacts it 
has helped to make. We suggest that this will require sone 
increase in funding. 
We feel, however, that the project is now sufficiently well 
established for it to charge producers a fee for services 
provided, with the object of making it self-financing in the 
medium term. 
10. BABEL - Broadcasting Across the Barriers of European 
Language 
This is an assocation between MEDIA 92, the European 
Broadcasting Union, and the Alliance Européenne pour la 
Television et la Culture. It grants aid for dubbing and 
subtitling programmes to be broadcast by television 
organisations. Since October 1988, 27 projects from 14 
countries have been supported with a view to 60 broadcasts in 
several languagues. In addition 4 large multilingual 
broadcasts with live simultaneous translations were broadcast. 
The project has an income o: 0.22 million ecu, 0.1 million ecu 
coming from MEDIA 92. The cost of administration amounting to 
maybe 30,000 ecu appears to be largely covered by the EBU. All 
staff is part time. It is not clear whether the cost of staff 
is included in the administration costs. . 
The Assises, while recognising BABEL's positive results, saw 
the need for an increase in its financial resources. 
MEDIA 92 intends to transform the project: to start to make 
advances on receipts instead of granting aid, and to create a 
permanent full time staff. 
-Cl-
We are convinced that the task of making programmes availcible 
to audiences in the various European languages is one of the 
major problems facing television in the coming years. 
We support the continuation of BABEL on the revised basis now 
proposed by MEDIA 92. We recommend in particular that its work 
should be extended to encompass the new technologies available 
to maximise multilingual transmissions (such as new television 
standards and teletext). An increase in funding is required. 
-cl-
11. EVE- European Video Area 
The study phase of this project has been completed. The 
project is run in co-operation between The Irish Film Board and 
Médiathèque of Belgium. It is intended by the spring of 1.990 
- to provide a system of advances on receipts for videotapes 
when the issuer/distributor is reluctant to take the financial 
risk. 
- to arrange co-operation between existing European public 
médiathèques and libraries to encourage the issue of 
video-films that are at present unprofitable. 
It is intended that the project should have a loan fund of 
1 million ecu and an administration budget of 0.4 million ecu 
covering both the Dublin an! Brussels offices. 
Dublin is an interesting centre for a MEDIA project, but we had 
difficulty in seeing the ne=d for an independent existence of 
this project, since distribution deals nowadays include video 
rights together with rights for film and television. We 
consider it should either be incorporated into EFDO or at least 
work in very close co-operation with it. As for the proposed 
co-operation between médiathèques, we understand this already 
exists and we are not convinced that MEDIA 92 need be involved. 
-4 4-
12. Comments on Matters Outside the Immediate Remit 
During our inquiries into the various MEDIA projects, people in 
the film and television industries raised with us certain 
additional issues on which they argued that the Commission 
could help to promote more European co-operation. 
The most substantial handicap for European co-productions is 
the different laws operating within the audio-visual supporting 
systems, covering such matters as copyright, financing, trade 
procedures, technical standards, quotas etc. Many in the 
industry believe - and we agree - that as a first priority, the 
EC should work towards harmDnising the different laws and 
systems in order to establish the best possible climate for 
European co-productions. 
Film makers and those responsible for helping the growth of a 
European film industry urge that the Commission should 
encourage cinema exhibition:? by ruling that cinema seats should 
be taxed at the lowest rate of VAT. The film industry argues 
that it is in the cinema that their products are tested, and 
that it is on its showing in a cinema that a film establishes 
itself in the video and television market place. 
We appreciate that these matters lie outside our terms of 
reference, but we feel that there is considerable force in them 
and that given the wish of the Commission to support a 
distinctive European audio-visual industry, we should mention 
them in this report. 
One issue on which we were not asked to comment but of which we 
became aware is the geographical spread of the individual MEDIA 
projects. As we see it, concentrating the projects in one or 
two centres could be cost effective and encourage interaction 
'(,&-
between them. If, on the other hand, it is felt desirable for 
Community reasons that the projects should be spread widely, 
then we must point out that at present several are based in 
Brussels, and of the rest, not one is situated south of the 
latitude of Geneva. 
We hope, in any case, that individual member states will not 
seek to extract strict proportional quotas from the MEDIA 92 
funding. Apart from the practical difficulty of achieving 
this, we believe that MEDIA 92's role, in addition to 
stimulating the European, industry as a whole, is to give 
particular support to the smaller countries, and regions, and 
particularly those with low production. In the medium term, on 
the other hand, such targeted assistance will benefit the 
industry right across the Community. 
- u 
13. EPILOGUE 
Subject to our reservations: about certain individual projects, 
it is our judgement that MEDIA 92 has fully demonstrated that a 
five year action programme would make a major contribution 
towards developing a European audio-visual industry which would 
offer a distinctive European perspective on the Community's 
screens, and would be more internationally competitive and, by 
no means least, would strengthen the film and television 
industries in the smaller ctnd less prosperous areas of the 
Community. 
We also believe that several of the MEDIA 92 projects - EFDO, 
ESF and CARTOON - could be powerful instruments in developing 
co-operation between the members of the Community and what we 
may hopefully describe as the newly re-emerging democracies of 
Eastern Europe. If the Community's action programme is 
implemented, is it fanciful to speculate that by the end of its 
five year term MEDIA 92 micht be providing an umbrella for 
audio-visual co-operation from the Atlantic to the Urals? 
Sir Ian Trethowan 
March 1990 

ISSN 0254-1475 
COM (90) 132 final 
DOCUMENTS 
EN 16 
Catalogue number : CB-CO-9Û-190-EN-C 
ISBN 92-77-59855-7 
Office for Official Publications of the European Communities 
L-2985 Luxembourg