25. 11. 85 Official Journal of the European Communities No C 303/19 
Opinion on the proposal for a Council Regulation on a Community aid scheme for non-
documentary cinema and television co-productions (*) 
(85/C 303/08) 
On 2 May 1985 the Council decided to consult the Economic and Social Committee, under Article 
198 of the Treaty establishing the European Economic Community, on the abovementioned 
proposal. 
The Section for Industry, Commerce, Crafts and Services, which was responsible for preparing the 
Committee's work on the subject, adopted its opinion on 4 September 1985, in the light of the 
report by Mr Broicher. 
At its 229th plenary session (meeting of 25 September 1985) the Economic and Social Committee 
adopted the following opinion by 73 votes to two, with nine abstentions: 
1. General comments 
1.1. The Economic and Social Committee generally 
welcomes the aims of the proposal, in line with its opinion 
on the Green Paper on the establishment of the common 
market for broadcasting especially by satellite and cable. 
1.2. However, the proposal has a number of short­
comings, particularly as to its practical feasibility. This is 
partly because there is not sufficient clarity about the basic 
differences between the 
— production and transmission of television programmes, 
and the 
— production and distribution of feature (cinema) films. 
In attempting to assist both areas, a virtually identical 
support mechanism is being proposed for two sectors with 
fundamentally different market positions, particularly in 
the EEC. 
1.3. Television programmes in the Member States are 
transmitted exclusively by specially set up or licensed 
television companies (State-owned, governed by public 
law, private). In the individual countries their number is 
limited (generally two to five channels of national 
significance). Where private organizations are licensed a de 
facto monopoly or oligopoly is also formed very quickly 
(e.g. Mr Berlusconi in Italy, or the SAT 1 consortium in 
Germany). Television companies fund their productions 
mainly from licence fees or advertising revenue. However, 
it is in their interests to see that production is as economical 
as possible. Small television companies, particularly in the 
smaller Member States, have a relatively limited income, 
and are thus heavily dependent on bought-in productions 
(mainly Anglo-American). Television companies in the 
larger countries, however, tend to tailor a large part of their 
productions to their particular requirements, and make 
f1) OJ No C 125, 22. 5. 1985, p. 13. them themselves. The planned aid can provide an incentive 
to rely more heavily on international co-productions 
(which already exist in many forms) and to curb both the 
buying-in of finished productions and the making of own 
purely national productions. 
1.3.1. The fact that the proposal seeks to concentrate 
support for co-productions on the non-documentary area is 
to be welcomed. This will be the area with the greatest 
demand (although demand will not increase tenfold in the 
foreseeable future), and until now this area has also been 
the most dependent on the international buying-in market. 
It is also the area in which bridges between the countries 
involved can be built most quickly. Quite apart from this 
sector's economic importance and impact on employment, 
the cultural significance of European feature films is also a 
reason for supporting co-productions. 
1.3.2. The fact that private producers are also to be 
eligible for support is to be welcomed (2). 
1.3.3. The market impact of television productions is 
more or less known when the relevant co-production 
agreements are concluded and the broadcasting under­
takings given. The co-production is usually shown once or 
twice in the countries of the companies party to the co-
production agreement. As the financial outcome is thus 
reasonably certain in advance, an interest-free loan is the 
minimum incentive to ensure that the offer is taken up. 
Irrespective of EEC financial support, co-productions have 
the financial advantage that costs are shared by the co-
producers, but each co-producer has full broadcasting 
rights in its country. 
(2) These play a major role in the production of programmes in 
Germany for ZDF (German TV Channel 2). Each year 
contracts with a total value of some DM 200 million are placed 
with around 60 independent producers in Germany; this is 
about 40 % of the available funds. 
No C 303/20 Official Journal of the European Communities 25. 11. 85 
1.4. Feature films are a completely different matter. 
1.4.1. A feature film is essentially an internationally 
marketed product, reaching the market via cinemas in the 
individual countries, irrespective of whether it is an 
international co-production or not. The financial return 
depends on box-office receipts and cannot be anticipated 
by a distribution guarantee. It thus remains uncertain until 
the end. A cinema film may bring in 10 or even 100 times its 
production cost, but it may equally only bring in a fraction 
of it, so that producers are unable to repay a loan. 
1.4.2. Quite apart from the crisis in the sector, the 
European cinema film industry should receive Community 
support for international co-productions which give 
European cinema-goers the feeling that they live in a real 
Community., Moreover, Community aid for films also 
ultimately benefits Community television, which is the 
final user. 
1.4.3. There is thus a need for specific application and 
allocation arrangements which take account of the 
abovementioned special characteristics of the two areas. 
The Committee suggests that the Regulation be subdivided 
into two distinct parts: one governing the selection criteria 
and aid arrangements for the television sector and the other 
doing the same for the cinema film sector. An aid scheme of 
this type, divided into two parts but contained in a single 
Regulation, would ensure that both areas benefit simul­
taneously from the Community aid system. 
1.4.4. With regard to cinema films, the Committee 
points out that, in addition to specific support, harmoniz­
ation of national legislation is required in order to create a 
true European internal market. The Commission should, 
therefore, in collaboration with representatives of the film 
industry, take measures to make European cinema film 
production more internationally competitive. 
2. Specific comments on the individual articles of the 
proposal 
2.1. Article 1 
To come closer to the objective mentioned in the third 
paragraph, the case should be considered for allowing 
partners from the 'smaller' Member States to receive aid 
even if they cannot fully meet the criteria laid down. The 
Regulation ought in any event to specify the way in which 
support to film production in the smaller Member States is 
to be stepped up. 2.2. Article 3 (1) 
In contrast to television, film co-productions should be 
eligible for aid when they involve two partners from 
different Member States. 
2.3. Article 3 (4) 
The 60 % maximum should dropped for the film sector. As 
regards the television sector one should wait until sufficient 
experience has been accumulated. 
2.4. Article 3 (6) 
The proposal limits the contribution of co-production 
partners who are nationals of non-member countries to 
20 %. The Committee notes that the Commission provides 
no economic justification for this limit. The Committee 
fears that, although the 20 % ceiling may be politically 
justified at present, it could-in the long term form an 
obstacle to co-productions. The Committee therefore asks 
the Commission to review this ceiling periodically in the 
light of experience. 
2.5. Article 4 (2) 
In keeping with the comment on Article 3 (1), the 
distribution guarantee should be limited to two countries in 
the case of film co-productions. 
2.6. Article 5 (3) 
The situation described in the general comments means 
that distribution promotion measures do not play a decisive 
role in the case of television productions. The important 
factor is the production of copies in several languages. On 
the whole, however, EEC support should not be dependent 
on the nature of the co-produced material. Allocation of aid 
in two parts, one for production and one for distribution, is 
therefore inappropriate for both cinema films and 
television productions. 
2.7. Article 6 (3) 
Although interest-free loans are to be granted for television 
co-productions (cf. Article 7(1)), interest is to be charged in 
the case of cinema film productions. When fixing the 
interest rate and repayment conditions, the Commission 
should at least take account of the economic difficulties 
faced by this sector. 
The Committee also suggests that it be specified that 
repayment of the advance should be geared to the box-
office receipts. 
25. 11. 85 Official Journal of the European Communities No C 303/21 
2.8. Article 8 
The ESC should be asked for its views on the implementing 
provisions to be drawn up by the Commission on such 
major points as allocation arrangements and selection 
criteria. 
2.9. Article 9 
At least in the case of television productions, the proposed 
group of experts is too large and unwieldy. There is also not 
much point in film distributors being involved when the 
group discusses television productions. It would therefore 
Done at Brussels, 25 September 1985. 
Gerd MUHR 
APPENDIX 
to the opinion of the Economic and Social Committee 
Change made to the text during discussions 
The following paragraph was deleted from the Section opinion during the debate, being replaced by an 
amendment 
2.4. Article 3 (6) 
If the aim of the Regulation is to boost Community television co-productions and give them a more important 
position on the world market, one should not fix too low a ceiling for the participation of partners from non-
member countries. Too low a ceiling would prevent a greater market from being opened up for Community co-
productions beyond the Member States and would prevent greater profitability from being achieved as a result 
of that larger market. All experience indicates that a broadcasting guarantee in third countries can generally be 
secured only if the country in question has participated in the co-production. The financial burden on partners 
from Member States would also be lighter if an appreciable proportion of the cost of a production could be 
passed on to partners from non-member countries, particularly since this participation by non-member 
countries would not mean any increase in the overall cost. The partners from the Member States would still 
have a dominating position if their minimum contributions were 60 % of the production costs. These 
arguments apply also to film productions and would mean that an appreciable proportion of the aid granted in 
that sector in the form of advances on earnings would definitely be recouped. 
Result of the vote be better to have a smaller group of specifically television 
experts to make decisions on television programmes. It is 
also not necessary for cinema operators to be involved in 
the group of experts dealing with the cinema. 
2.10. Article 13 
The Committee asks that the annual report be submitted to 
the ESC, as well as to the Council and the European 
Parliament. 
The Chairman 
of the Economic and Social Committee 
For: 38. Against: 33. Abstentions: 9.