EUROOPAN YHTEISÖJEN KOMISSIO 
rV ie v\- ix 
Bryssel, 16.07.1995 
KÖM(95)263 lopull. 
KOMISSION KERTOMUS 
NEUVOSTOLLE, EUROOPAN PARLAMENTILLE 
JA TALOUS- JA SOSIAALIKOMITEALLE 
ENSIMMÄINEN VUOSIKERTOMUS KEHITTYNEEN 
TELEVISIO-OHJELMATOIMINNAN KÄYTTÖÖNOTTOA 
EUROOPASSA KOSKEVAN TOIMINTASUUNNITELMAN 
TÄYTÄNTÖÖNPANOSSA SAAVUTETUSTA EDISTYKSESTÄ 

A 
ENSIMMÄINEN VUOSIKERTOMUS KEHITTYNEEN TELEVISIO-
OHJELMATOIMINNAN KÄYTTÖÖNOTTOA EUROOPASSA KOSKEVAN 
TOIMINTASUUNNITELMAN TÄYTÄNTÖÖNPANOSSA SAAVUTETUSTA 
EDISTYKSESTÄ 
YLEINEN JOHDANTO 
Kehittyneen televisio-ohjelmatoiminnan käyttöönottoa Euroopassa koskevasta 
toimintasuunnitelmasta tehdyn neuvoston päätöksen1 6 artiklan mukaisesti tämä kertomus 
tehdään toimintasuunnitelmalla avustettujen laajakuvatoimintojen ja ohjelmatuotannon 
ensimmäisen kokonaisen vuoden päättymisen johdosta2. Komissio käyttää erityisen 
mielellään tilaisuuden kertoa ensimmäisen vuoden toiminnoista, koska tulokset ovat yleisesti 
ottaen erittäin myönteisiä, vaikka vielä on liian aikaista puhua Euroopan laajuisesta 
täydellisestä menestyksestä. 
I Avaintietojen yhteenveto 
Pääpiirteet ovat seuraavat: 
Lähetystoiminta: 
150 000 laajakuvatelevisiota (16:9) myyty vuonna 1994; 
vuonna 1995 ennustetaan myytävän 430 000 laajakulmatelevisiota (16:9); 
kahdeksassa jäsenvaltiossa rahoitettu 22 toimintaa; 
1 päivään heinäkuuta 1995 mennessä lähetetään 30 000 tuntia ohjelmaa; 
Kehittyneen televisio-ohjelmatoiminnan käyttöönottoa Euroopassa koskevasta toimintasuunnitelmasta 22 
päivänä heinäkuuta 1993 tehty neuvoston päätös 93/424/ETY. EYVL N:o L 196, 5.8.1993, s. 48. 
2 Tässä kertomuksessa yksityiskohtaisesti selostetut ja eritellyt määrärahojen jakamisen tulokset koskevat 
viitejaksoa 22.7.1993 - 31.12.1994. 
<A W-
Ohjelmatuotanto: 
laajakulmatuotantoa (16:9) rahoitettu 13 200 tunnin edestä, joista 65 % on pitkäikäisiä 
"stock"-ohjelmia. 
rahoitetut uudet ohjelmat tyypeittäin: 
- 2 500 tuntia suoria lähetyksiä 
- 2 000 tuntia urheilua 
- 1 400 tuntia dokumentteja 
- 900 tuntia kulttuuritapahtumia 
- 700 tuntia draamaohjelmia 
5 600 tuntia ohjelmien konvertointia 
Tällä kertomuksella kehitetään näiden tietojen ympärille rakenne, jotta neuvosto ja 
parlamentti saavat tietoja ajankohtaisesta kehityksestä. 
Kertomus rakentuu seuraavasti: 
Tämä yleinen johdanto, jossa kootaan toimintasuunnitelman perusteet, tavoittaa ja 
pääasialliset toimintamenettelyt. 
A jakso: lähetystoiminta 
B j akso : ohjelmatuotanto j a konvertointi 
Yhteiset päätelmät 
Tämä kertomus on televiestintää, tietotekniikan markkinoita ja tutkimuksen hyödyntämistä 
käsittelevän pääosaston XIII ja tiedotusta, viestintää, kulttuuria ja audio-visuaalista alaa 
käsittelevän pääosaston X yhteistyön tulos. Pääosastolla XIII on toiminnallinen vastuu 
toimintasuunnitelman lähetystoiminnasta; pääosastolla X on toiminnallinen vastuu 
toimintasuunnitelman ohjelmantuotannosta ja konvertointitoiminnasta. 
II Laajakulmatelevision (16:9) viehätys ja sen asettamat haasteet 
Toimintaohjelma on yksi osa yhteisön kolmiosaisesta uudelleensuuntautumispolitiikasta 
kehittyneen televisiotoiminnan käyttöönoton osalta, jolla ei pyritä keskittymään ainoastaan 
teräväpiirtotelevisiotoiminnan käyttöönottoon mahdollisimman nopeasti, vaan kohti 
laajempaa politiikkaa, jossa on useita toimintamahdollisuuksia, mukaan lukien 
digitaaliteknologian suomat mahdollisuudet. Tämä politiikka on olennainen osa yhteisön 
audiovisuaalista politiikkaa, johon kuuluvat myös muut välineet, kuten MEDIA-ohjelma ja 
televisiota ilman rajoja koskeva direktiivi. 
AC. 
YHTEISET PÄÄTELMÄT: 
Ohjelman tuotanto ja konvertointi 
Tällä hetkellä on mahdollista tehdä ainoastaan alustavia johtopäätelmiä toimintaohjelman 
tuloksista. Erityisesti voidaan kuitenkin todeta, että: 
toimintasuunnitelman avulla Euroopan ohjelman tuottajille radioyhtiöille voidaan 
tiedottaa uusista tekniikoista ja television kehityksestä. Heitä ohjataan suosimaan 
eurooppalaista. Ohjelmien kierto Euroopan tasolla on ratkaiseva kysymys 
markkinoilla, joilla ohjelmia on tiettyjen maiden osalta vielä melko vähän. 
riippumattoman tuotantoalan kehittyminen on rohkaiseva merkki 
Euroopan unionin osallistuminen auttaa herättämään taloudellisten toimijoiden 
mielenkiinnon ja tuen ja sen avulla voidaan irtautua muista rahoituslähteistä 
Riippumattomat tuottajat ovat kuitenkin vielä taloudellisesti heikkoja ja niiden pienet 
käteisvarat tekevät yhteisön avun välttämättömäksi. Yhteisön toimet alan paljouden ja 
moninaisuuden vahvistamiseksi on oltava samanlaiset kuin niiden rakenteiden vahvistamisen. 
Näiden päätelmien johdosta herää kysymys toimintasuunnitelman arvoonsaattamisesta. 
Tietyistä päätelmistä voidaan johtaa konkreettisia ehdotuksia. Kuinka järjestää 
yksinkertaisesti laajakulmatelevisioyhtiöiden (16:9) yhteydenotot, jotta Euroopan unioni voi 
nivoa yhteen toimivallan ja tieto-taidon siirron? 
Tietyt pieniin maihin, joissa on rajoitetut audiovisuaaliset mahdollisuudet, sijoittautuneet 
laajakulmatelevisioyksiköt ovat kohdanneet vaikeuksia löytää ohjelmia 16:9-kuvasuhteessa, 
koska niillä ei ole alusta alkaen ollut varaa tuottaa ohjelmia ja niillä on vaikeuksia täyttää 
velvollisuutensa lähettää ohjelmia 16:9-kuvasuhteessa. 
Euroopan komissio tekee maaliskuusta 1995 alkaen tukipyyntöjä koskevien asiakirjojen tutki­
mukseen perustuvan kyselylomakkeen avulla yksinkertaisen tietokannan, jossa on 
ohjelmakohtainen luettelo kaikista 16:9-kuvasuhteessa olevista eurooppalaisista ohjelmista: 
oikeuden omistaja jokaisella alueella, oikeuksien tyypit (kaapeli, satelliitti, maanpäällinen 
lähetysverkko,) ja niiden kestoaika, kieli, saatavilla olevat versiot. Ne, joilla on tarvetta 
tällaisiin tietoihin, pääsevät tietokantaan Internetistä ja "World Wide Web" -verkon kautta. 
16:9-yhtiöiden osalta toimintasuunnitelmassa vahvistetaan, että laajakulmatelevisio on osa 
niiden taktiikkaa ja niiden strategian väline, joka sallii niiden osallistua Euroopan 
audiovisuaalisten ohjelmaluetteloiden kehittämiseen. 
xd 
Lähetystoiminta 
Hankintojen kannalta 22 toiminnan saavuttaminen jäsenvaltioissa on osoitus lähettäjien 
mielenkiinnosta ja niiden halukkuudesta osallistua 16:9-tarjontaan yleisölle neuvoston 
päätöksessä määrätyin edellytyksin. On kuitenkin liian aikaista arvioida 
toimintasuunnitelman lähetysrahoituksen vaikutusta. Lähetyksen rahoittamisen ja rahoituksen 
vaikutuksen markkinoihin välillä on viive. Vaikutus kuluttajaelektroniikkamarkkinoihin 
selvinnee vuoden 1995 lopussa ja vuoden 1996 ensimmäisen vuosineljänneksen aikana. 
Siihen mennessä markkinoilla on saatavilla uutta teknologiaa, mikä edelleen lisää 16:9-
kuvasuhteessa olevia toimintoja. Silloin on jo näkyvissä toimintasuunnitelman muodollinen 
loppuminen, joka tapahtuu 30 päivänä kesäkuuta 1997, joka mahdollisesti osoittaa neljän 
vuoden olleen liian lyhyt aika näin suurelle tehtävälle. Erityisesti uusilla jäsenvaltioilla on 
ainoastaan vähän aikaa hyötyä toimintasuunnitelmasta. Lisäksi toimintasuunnitelman 
mahdollisuudet tehdä vaikutusta markkinoilla on pienentynyt 80 % rahoitusosuuden vuoksi; 
tämä vähentää lähetysaikaa. 
Komissio pitää 16:9-kuvasuhteen käyttöönottoa strategisena elementtinä, jotta toimijat 
audiovisuaalisella ja kulutuselektroniikan markkinoilla voivat tarjota yleisölle 
tietoyhteiskunnan lähitulevaisuudessa, jossa on paljon uusia palveluja ja tuotteita. Se 
heijastaa erityisesti elokuvan ja television pitkään jatkunutta lähenemistä. 16:9-kuvasuhdetta 
voidaan tästä syystä verrata muihin televiestinnän ja tietokoneiden markkinoilla toimijoiden 
avustamiin tärkeisiin elementteihin. Tämän vuoksi toimintasuunnitelma on jatkuvasti 
strategisesti tärkeä markkinoilla toimijoille audiovisuaalisessa ja kuluttajaelektroniikan 
teollisuudessa. Komissio odottaa seuraavaa mahdollisuutta antaa neuvostolle ja Euroopan 
parlamentille kertomus kehityksestä. 
GENERAL INTRODUCTION 5 
I Summary of key data 5 
II The attraction of 16:9 and the challenge 6 
III Resume of objectives, approach and targets 9 
SECTION A: BROADCASTING 13 
1. THE LAUNCH OF 16:9 BROADCASTING IN EUROPE 13 
1.1 Snapshot of services as at 30.12.94 13 
1.2 Call 93 , . 13 
1.3 Call 94/1 16 
1.4 Evaluation methodology 18 
1.5 Allocation of hours by Member State 19 
2. IMPACT 19 
2.1 The French market 20 
2.2 Germany: first indications 22 
2.3 Availability of studio equipment 23 
2.4 Public visibility and press impact 23 
3. FUTURE PROSPECTS 23 
3.1 Resource overview 23 
3.2 International comparisons 26 
3.3 16:9 analogue 27 
3.4 16:9 digital 27 
J 
SECTION B: PRODUCTION AND CONVERSION OF PROGRAMMES . . • 29 
1. INTRODUCTION 29 
1.1 The Action Plan, an integral part 
of the European Union's audiovisual policy 29 
1.2 Promoting 16:9: consistency of Community measures 31 
2. THE RESULTS OF A SECTORAL FINANCIAL STRATEGY 33 
2.1 Community aid 33 
2.2. The overall results, expressed in hours and ECU 35 
3. THE EFFECTS OF THE ACTION PLAN 41 
3.1 The programmes, a qualitative evaluation 41 
3.2 The impact of the Action Plan: developing the equipment 
market and the audiovisual catalogue 46 
JOINT CONCLUSIONS 48 
ANNEX 50 
4 /h 
First Annual Report on Progress in Implementing 
the Action Plan for the Introduction 
of Advanced Television Services in Europe 
GENERAL INTRODUCTION 
Pursuant to Article 6 of the Council Decision on an Action Plan for the 
Introduction of Advanced Television Services in Europe,1 this report marks the 
first complete year of wide-screen services and programme production assisted 
by the Action Plan2. The Commission is especially pleased to take up the 
opportunity to report on the first year of operations because the outcome is 
generally very positive, even if it is too early to proclaim outright success on a 
European scale. 
I Summary of key data 
The headline facts are as follows: 
Broadcasting : 
150,000 wide-screen 16:9 TV sets sold in 1994; 
430,000 projected for sale in 1995; 
• 22 services funded in eight Member States; 
30,000 hours to be transmitted up to 1 July 1995; 
i 93/424/EEC, Council Decision of 22 July 1993 on an Action Plan for the Introduction of Advanced 
Television Services in Europe. O.J L 196, 5.8.1993, P.48 
The results of the allocation of funds detailed and analysed in the present report concern the 
reference period 22/7/93 to 3 1/12/94. 
Programme production 
• 13,200 hours of 16:9 production funded, of which 65% are long shelf-life, 
stock programmes. 
• New programme production funded, by type : 
- 2,500 hours of live recording 
- 2,000 hours of sport 
- 1,400 hours of documentaries 
- 900 hours of cultural event 
- 700 hours of drama 
• - 5,600 hours of conversion of programmes 
This report will develop the context around this data so that the Council, and 
Parliament are informed upon progress to date. 
The report is structured as follows. 
This General Introduction, which summarises the rationale, objectives 
and main operational procedures of the Action Plan. 
Section A: Broadcasting 
Section B: Programme Production and Conversion 
Joint Conclusions 
This report is a collaboration between Directorate-General XIII, 
Telecommunications, Information Market and Exploitation of Research and 
Directorate-General X, Information, Communication, Culture, Audiovisual. DG 
XIII has operational responsibility for the broadcasting part of the Action Plan; 
DG X has operational responsibility for the programme production and 
conversion part of the Action Plan. 
II The attraction of 16:9 and the challenge 
The Action Plan is one component in a three element reorientation of Community 
policy with regard to the introduction of advanced television, away from an 
exclusive focus on the introduction of high definition television services by the 
fastest possible route, and towards a broader policy embracing a number of 
different service possibilities, including those made possible by digital 
technologies. This policy is itself an integral part of the Community Audiovisual 
Policy which includes other instruments such as the MEDIA programme and the 
Television without Frontiers Directive. 
5 The Action Plan's role is promotional, namely to accelerate market penetration of 
16:9 consumer electronics equipment by stimulating broadcast services and 
programme production. The second element in the reoriented policy is 
legislative, consisting of a draft Directive on the Use of Television Transmission 
Standards3, intended to replace the earlier "MAC Directive"4. Unlike its 
predecessor, the new directive does not seek to set market objectives, but to 
provide a supportive framework for market development, by underpinning areas 
of consensus, including transmission standards and the 16:9 format itself. The 
third element is the focus on digital broadcasting, essentially preparing the 
ground for the market introduction of digital services and associated products 
through standardisation and consensus forming among the market parties. The 
Commission set out its approach in the Communication on Digital Video 
Broadcasting5 and the main lines of that Communication were endorsed by 
Council and the European Parliament6. The modified policy orientation stresses 
the key role of the market actors themselves in defining market requirements. The 
work of the European Digital Video Broadcasting Group has supplied important 
inputs into both the legislative element and the focus on digital broadcasting, 
while the Action Plan is clearly market-led, both in its operation and objectives. 
A market-led view of broadcast services suggests the following perspective on 
the earlier phase of the policy. The experience with High Definition Television 
(HDTV) highlighted the structural division between the market objectives of 
manufacturers and broadcasters. HDTV was considered too costly by 
broadcasters and programme producers and more appropriately as a digital 
service some time in the future, given the trend towards digital. Digital HDTV 
broadcasting, together with the manufacturing and introduction of consumer 
equipment at a price acceptable to the consumer, will be a later evolution of both 
digital technologies and the market itself. However, the introduction of HDTV 
services still remains an ultimate policy objective; meanwhile HDTV has an 
important role in programme production, particularly for "stock" programmes 
with long-shelf life. HDTV is consequently supported by the Programme 
Production part of the Action Plan7 
Currently, European and American broadcasters prefer other cheaper service 
possibilities offered by digital techniques. Digital television's primary consumer 
J Following the European Parliament's First Reading on 20.04.1994 (Ref PE 180.706), the Council 
adopted a common position on December 22, 1994. 
4 Council Directive 92/38/EEC, OJ No L 137/17, 20.5.92, P. 17 
COM (93) 557 final, 17 November 1993 
6 Council Resolution of 27 June 1994 on a framework for Community policy on digital video 
broadcasting, 94/C 181/02, OJ No C 181/3, 2.7.94; Resolution of the European Parliament, on the 
strategy to introduce digital HDTV, PE 180.707, 20.04.1994 
7 Around one quarter of all programme hours supported by the Action Plan are in HD video 1250 
lines. See section B, 3.1.3, Table 16, "New productions funded: breakdown per format" 
benefits, obtainable from systems that are commercially and technically feasible 
today, is to increase the number of programmes transmitted, thereby broadening 
programme choice, and to make consumer access easier, typically through 
services like Near Video on Demand, which'multiplies the number of possibilities 
to see a particular programme. Pay television broadcasters will be the first to offer 
such services, which can be introduced by adding a decoder box to existing 
television receivers. However, the different market parties have been able to agree 
that wide-screen television in the 16:9 format would be commercially feasible 
meanwhile and that 16:9 is attractive to consumers in its own right, no matter 
which transmission system is used. 
There were a number of reasons why 16:9 emerged as a point of consensus: 
At consumer level, 16:9 improves the impact of programmes because of its 
superior ergonomics and its format promotes the convergence between 
cinema and TV already established by video recorders and pay-TV movie 
channels, reflected in the "Home Cinema" concept8 already being used to 
market products and services; 
As a display format, it is technologically neutral; receivers can display 
wide-screen pictures transmitted in either analogue or digital form. This 
provides reassurance for the consumer since the display usually accounts 
for 2/3 of the value of a receiver; 
Given that the complete transition to digital will be over a long period, 
perhaps up to twenty years, there is scope to upgrade existing analogue 
services to wide-screen using systems like D2-MAC and PAL-Plus, as 
well introducing new digital systems. 
This is an important point because existing analogue terrestrial services still 
account for the majority of television viewing and a market-led approach must 
take this into account; and: 
16:9 is seen as the future format for television, facilitating the eventual 
introduction of HDTV; indeed, it is the only element on which everyone 
currently agrees. 
The "Home Cinema" approach was first used to sell audio processors capable of reproducing the 
multi-track surround sound encoded on many movie soundtracks, thereby enhancing realism and 
impact. "Home Cinema" is also being used to market 16:9 consumer equipment, bringing cinema-
style wide-screen presentation into the home. The label could also be applied to HDTV in future, 
which would add the final element, the "Big Screen" experience. 
The challenge was to translate this political consensus into action, by breaking the 
"chicken and egg" deadlock between the market parties. Broadcasters stated there 
would be no wide-screen programmes and broadcasting until there were wide-
screen receivers while manufacturers argued that broadcasts should precede 
receivers. The deadlock resulted in a "market failure" which would have blocked 
the introduction of 16:9. Market forces could not therefore initiate a solution 
themselves, given this structural difficulty; the problem was how to trigger them. 
Simply stated, the role of the Action Plan is to trigger the market and to overcome 
the structural deadlock between different groups of market actors. The Action 
Plan is one element of a three part policy towards Advanced Television. This 
report outlines progress during the Action Plan's first year of operation. 
Ill Resume of objectives, approach and targets 
"In order to contribute to market penetration by receiver equipment in the 16:9 
format, the objective of the Action Plan is to ensure the accelerated development 
of the market for advanced television services in Europe in the 16:9 format using 
625 or 1250 scanning lines."9 
The approach is based on stimulating the broadcasting and programme production 
elements in the value chain so that all the different actors and elements in the 
television service chain necessary to deliver 16:9 services to the home could fall 
into place. This is a condition for achieving the accelerated development of the 
market for 16:9 services. In the light of this approach, the Action Plan lays down 
two indicative targets to be achieved during its life of the Action Plan: 
(i) "a critical mass of advanced television services in the 16:9 format; 
(ii) a sufficient and increasing volume of programming in the 16:9 format and 
with high technical quality both in picture and sound and of such a nature 
as to facilitate an optimum audience rating, such programming to be 
broadcast in the above mentioned services". 
The key insight is that there had to be a coherent and synchronised offering by the 
market parties, particularly the broadcasters and the programme makers, if 16:9 
were to succeed. Although manufacturers are excluded from receiving any 
financial support made available under the Plan10, industry's role in making 
equipment available on the market is also crucial. The Plan's approach is clearly 
posited on taking into account the complete audiovisual "value chain" rather than 
considering any individual sector. 
9 Annex of Council Decision of 22 July 1993 on an Action Plan for the Introduction of Advanced 
Television Services in Europe. O.J L 196/48, 5.8.93 
10 ibid, Art 1 
10 
The funding approach targets the additional costs of introducing wide-screen 
incurred by broadcasters for broadcasting 16:9 services and by programme 
makers (including broadcasters) for producing wide-screen programmes. These 
additional costs have been calculated as hourly flat rate payments. 
Figure 1A 
Broadcasting Costs 
Flat rate 
(ecus per hour) 
'"'"First 50 hours 6 000 
From the 50 first hours 2 500 
Figure IB 
Programme Making Costs 
Programme Type Flat rate 
(ecus per hour) 
Programmes remastered from existing material, suitable for 3 000 
broadcasting in 16:9 and in 625 lines 
Programmes remastered from existing material, suitable for 5 000 
broadcasting in 16:9 and in 1250 lines 
Super 16 mm and 16:9 video production 12 000 
35 m and HP - video (1250 lines) production | 25 000 
Figure IB reproduces the programme making costs in the Council Decision. 
These were applied to the 1993 Call. Figure 1C shows the modified 
programme production costs applied in subsequent calls.11 
1 See Section B 2.1.2 for a discussion of the modifications to the hourly rates for programme 
making. 
11 
Figure 1C 
Revised Programme Making Costs 
Programme Type Flat rate 
(ecus per hour) 
Programmes remastered from existing material, suitable for 3 000 
broadcasting in 16:9 and in 625 lines 
Programmes remastered from existing material, suitable for 5 000 
broadcasting in 16:9 and in 1 250 lines 
Super 16 mm 12 000 
16/9 625-line video production 
a) stock programmes 12 000 
b) flow programmes hours 1 to 20 12 000 
21st and following hours 6 000 
35 mm production 30 000 
HD-video production (1250 lines) 
a) stock programmes 60 000 
b) flow programmes hours 1 to 20 20 000 
21st and following hours 10 000 
During the first year of the Action Plan, the Union contributed 50% of the above 
rates. It should be recalled that the Action Plan adopts a hybrid funding 
approach, with a proportion of the additional costs being found by the 
broadcaster or producer, typically from combinations of own resources, national 
funds12, and other market actors. 
Total Union funds allocated to the Action Plan are 228 MECU, including a 
reserve of 68 MECU to be committed after 1.1.95, with a Union contribution of 
up to 80% of the flat rates, in Member States whose markets are not fully served 
in the early stages of the implementation of the Plan. The Action Plan's total 
resources, including the Union's contribution, will be 405 MECU. 
2 Under the 50% funding régime, at least half of the non-Community funding must come from the 
applicant's own resources or some other economic operator, before projects can receive the 
Community contribution; see Annex to the Council Decision 5.1 CO- From 1.1.95, the start of the 
80% funding régime for late-starting markets, projects eligible for 80% require only 20% non-
Community funding. Such funding can be from public funds exclusively; See Annex 5.4. 

A*> 
SECTION A: BROADCASTING 
1. THE LAUNCH OF 16:9 BROADCASTING IN EUROPE 
1.1 Snapshot of services as at 30.12.94 
See Figure 2: Action Plan Broadcasting Map as at 30.12.94. 
Figure 2 is a map of the European Union with all 22 broadcast services supported 
by Action Plan funding shown. It illustrates the point that there is a reasonable 
choice of 16:9 services in France and Germany, following the first two calls for 
broadcast services, and consumers can select both publicly available services and 
pay television services funded by subscription. In the six other Member States, 
16:9 is still in the "break-out" stage. With the exception of Greece, there is at 
least one national service in each of these Member States, supplemented by one 
or more regional services. 
The following two sections explain how the Action Plan has developed 
following the 1993 and 1994 broadcast calls for proposal, by explaining some of 
the practical constraints faced by the Commission and the Member " State 
Committee in implementing the Action Plan. Perhaps the most important point to 
be underlined in advance is that the Action Plan is market-led, in accordance 
with the Council's intentions set out in the decision. The broadcasting part 
depends entirely on the quality of the proposals submitted by the broadcasters. 
The Commission's role is first to apply the project quality criteria to individual 
projects and second to apply the "spread and balance" criteria to the package of 
projects proposed to the Committee for funding. These are intended to prevent 
undue concentration or the creation or cartels; to ensure a wide distribution of 
services across the Union; and to involve independent producers. 
1.2 Call 93 
This was a joint call with the programme production side of the Action Plan. 
Opening on 1 September 1993 and closing on 15 October13, the broadcast 
services side attracted sixteen proposals. Sixteen broadcasters in six Member 
States offered over 100,000 hours of transmissions over the four year life of the 
Action Plan. This was ten times the number of broadcast hours for which 
financial resources were available under this first call. 
Application of the "spread and balance " criteria 
The first challenge was how to reconcile the excellent response with the 
limited resources available. Clearly, the Action Plan's "spread and balance" 
1J 93/C 237/06, OJ C237/23, 1.9.1993 
14 
criteria contain a Community imperative to cover as many Member States 
as possible; but this had to be satisfied without excessively reducing the 
range of services per market or the hours allocated to each broadcaster. If 
either were to be compromised too far, the market impact would be 
reduced. 
The Commission considered that the only way of satisfying all these 
criteria was to adopt a short funding period of no more than one year to 
stretch the budget over the widest possible range of services. The 
Committee of Member States' representatives14 agreed to a modified 
version of the Commission's original proposal: a nine month funding 
period from 1 October 1993 to 30 June 1994 for 16:9 broadcasters in 
France and the Netherlands using D2-MAC; and a nine month funding 
period from the start of service for PAL-Plus broadcasters in the other 
Member States, with the possibility to apply for supplementary hours in 
the 1994 broadcasting call for the period after 1 July 1994. 
Two important themes lay behind the discussion of these issues. First, the 
Commission saw that two requirements had to be fulfilled, the need to 
encourage the "pioneer" D2-MAC broadcasters in France and the 
Netherlands who had been waiting for the Action Plan for some time and 
second the necessity of sending a clear signal to manufacturers planning 
the launch of PAL-Plus consumer receivers. Although the Action Plan is 
transparent to standards and mandates no single technological approach to 
delivering 16:9 transmissions, the implementation of this principle needed 
to take into account the differing situations of the delivery systems. 
Clearly D2-MAC broadcasters, using a system that had been available for 
several years and with rapid time-to-market for consumer equipment, were 
better placed to deliver significant numbers of hours than the PAL-Plus 
broadcasters at this point. The proposed allocation of broadcast hours 
between Member States inevitably reflected this unbalanced situation. The 
discussion of how the "spread and balance" criteria should be applied led 
the Committee to adopt the following declaration: 
"...This principle must accommodate the differing development levels of 
national markets during the launch phase and must evolve towards a 
balanced distribution of the total Community contribution, which takes 
into account the differing Member State markets and responds to their 
evolution, in order to assure the Community dimension." 
The most important achievement of the first call was to permit the two 
major elements of the 1993 broadcast proposals to be supported with 
Action Plan funding, namely an attractive selection of services in France 
and Germany, despite the differing circumstances of those markets. In the 
'4 Set up by Art. 3 of the Council Decision in order to assist the Commission in the implementation of 
the Action Plan 
15 
Commission's view, the first call would have been less successful if it had 
only launched one of the Community's major markets; to have launched 
two meant a very positive start for the Action Plan and the prospect of 
boosting confidence in the market. 
Project quality criteria 
Table 1 shows the eleven projects that were ultimately funded. Of the 
sixteen projects offered, two were rejected for clear-cut reasons of non­
compliance with the project quality criteria. The Commission's initial 
proposal comprised fourteen proposals in all six Member States from 
which proposals were received. Three proposals were withdrawn during 
subsequent contractual negotiations. 
Figure 3 
ACTION PLAN 16:9 BROADCAST SERVICES FINAL ALLOCATION (1ST CALL 
1993) 
COUNTRY COMPANY HOURS 
France 
2. Netherlands 
Germany 
4. Spain 
5. Portugal 
TOTAL Canal+ 
MCM 
France Supervision 
Ciné Cinémas 
TV+* 
Première 
ARD 
BRF 
ZDF 
RTVE 
TVI 2000 
800 
2000 
1000 
5800 
1090 
1090 
900 
300 
300 
400 
1900 
350 
350 
210 
210 
9350 
16 
A crucial selection criterion for allocating resources among eligible 
projects is the achievement of high audience ratings. The Commission's 
guiding selection principle in applying the "Project quality" criteria in the 
annex of the decision was therefore to achieve maximum market impact by 
targeting projects which offered large audiences, considered to have the 
potential to drive the market. 
This criterion was refined to take into consideration Pay TV services, 
which offer smaller audiences in general, but compensate for this with a 
more focused audience whose characteristics include a high percentage of 
"early adopters" of new technology products. Pay-TV broadcasters have 
also made films their flagship service offering; this offers an obvious 
promotional synergy for 16:9, positioned by manufacturers as the "Home 
Cinema" format. 
1.3 Call 94/1 
This was also a joint call with the programme production side of the Action Plan. 
Opening on 5 February 1994 and closing on 15 March15, the broadcast services 
side attracted twenty nine proposals. Twenty five broadcasters in eight Member 
States offered over 125,000 hours of transmissions over the remaining three year 
life of the Action Plan. This was five times the number of broadcast hours for 
which financial resources were available under this second call for broadcast 
funding. The main characteristics of the response were as follows: 
All the broadcasters funded by the 1993 call responded to Call 94/1; 
Additional services were proposed in all but one of the Member States 
covered by the 1993 call; 
Broadcasters in three further Member States offered services: Belgium, 
Greece and United Kingdom; 
Three broadcasters submitted more than one proposal; and there was one 
transfrontier proposal. 
5 94/C 37/09, OJ C37/7, 5.2.1994 
17 
Application of the "spread and balance" criteria 
The financial resources available for broadcasting in this call were 
equivalent to over 20,000 hours of transmissions. This was more than 
double the resources available in 1993. Call 94/1 marked the peak of 
Action Plan funding in those early markets with the strength to drive the 
Community as a whole. 
The Commission advocated an eighteen month funding period for two 
reasons. The longer funding period would favour "late starters", by 
allowing them to build up more hours over an extended period. It would 
therefore help to widen the distribution of resources across Member States' 
markets by narrowing the gap between the "pioneer" services and those 
which started later. 
The second reason was linked to the future Action Plan budget. From 1 
January 1995, the resources available to the early markets, - funded at 50% 
of the flat rates - would be halved owing to the start of the 80% funding 
regime, for which the sum of 68 MECU was reserved in the Council 
Decision. The longer funding period would help reduce the impact of a 
50% reduction in resources following call 95/1. To this end, it was also 
proposed that successful applicants be permitted to request further 
resources for 1995, by applying for them in call 95/1. 
Project quality criteria 
22 broadcasters ultimately received Action Plan funding for 24 service 
projects. Four projects were rejected: two for reasons of minimal audiences 
and low market impact; another because a digital pay-TV service was felt 
to be premature, since standards had not been fixed and there was 
consequently no commitment by industry to provide receivers during the 
period covered by the call, which stipulated that services had to start by 31 
December 1994; a fourth was discarded because it was presented as an 
alternative to a project which was included in the funding proposal. One 
broadcaster decided not to persist with a proposal at the contractual 
negotiation stage. 
18 
Figure 4 
ACTION PLAN 16:9 BROADCAST SERVICES FINAL ALLOCATION (CALL 94/1) 
COUNTRY COMPANY HOURS 
1. France 
Germany 
Netherlands 
Portugal 
Spain 
Belgium 
UK 
Greece 
TOTAL Canal+ 
MCM 
France Supervision 
Ciné Cinémas 
Première 
ARD 
BRF 
ZDF 
3-Sat 
MDR 
TV+ 
Philips Media 
TVI 
RTVE 
TV3 
RTVA 
RTBF 
CanaH-
RTL-TVI 
Channel 4 
Granada 
TVS 2100 
1300 
4000 
1100 
8500 
2900 
450 
300 
600 
1000 
300 
5550 
1458 
750 
2208 
500 
500 
350 
320 
500 
1170 
1000 
950 
600 
2550 
550 
200 
750 
400 
400 
21628 
The Commission's approach to the evaluation of individual projects was 
similar in the 1993 call and call 94/1; it is described briefly in the next 
section. 
1.4 Evaluation methodology 
The Commission engaged a firm of consultants to assist with the technical 
evaluation of both calls. Their tasks were first to assess eligibility of proposals 
against the "project quality" criteria; second, to provide a ranking of the projects 
with particular emphasis on the likely attractiveness of the services to audiences; 
19 
third, to identify omissions and weaknesses in the proposals so that the 
Commission could address these in contractual negotiations. 
The second task, ranking the projects, was an important input into the 
Commission proposal for both calls. Consequently, the Technical Evaluators' 
Summary report was made available to the Committee. However, application of 
the "spread and balance" criteria was carried out by the Commission exclusively 
before formulating its proposal to the Committee. 
1.5 Allocation of hours by Member State 
Figure 5 shows how the resources available for broadcasting under the 1993 Call 
and Call 94/1 have been allocated by Member State. It is calculated in terms of 
broadcast hours, not money terms. 
Figure 5 
ALLOCATION OF HOURS BY MEMBER STATES UNDER THE 1993 AND 1994/1 CALL 
Belgium 8% 
UK 2% 
Greece 1% Portugal 2% 
[""Spain 5% 
France 47% Netherlands 11% 
Germany 24% 
2. IMPACT 
To help assess the impact, the Commission undertook its own research and 
systematically consulted industry. In autumn 1994, the Commission also 
contacted broadcasters and industry for their views on how the Action Plan was 
working and for their suggestions. 
One vital element to determine the success of the Action Plan is the sale of 
receivers. In most member states, it is too early to provide definitive analysis, 
either because 16:9 is still in "break out" mode with perhaps a single service or 
because broadcasting began very recently. Call 94/1 stipulated that services had 
to begin by 31 December 1994; the new PAL-Plus services funded by that call 
could not begin until near the end of the year because of the lead-time for 
supplying the encoders. 
20 
This section will present some early results from the more mature French market, 
- where 16:9 services started first - and where Action Plan resources have been 
focused, together with some early indicators from Germany. 
2.1 The French market 
Figure 6 
SALES OF 16:9 RECEIVERS IN THE FRENCH MARKET 
100,000 
1991 1992 1993 1994 
Figure 6 shows the sales of 16:9 receivers in the French market, with cumulative 
sales of around 160,000. In 1994, industry estimates that 100,000 16:9 receivers 
were sold, more than double the 1993 total. Sales began to increase sharply in 
autumn 1993, more or less at the time when the Action Plan enabled a significant 
increase in 16:9 broadcasting. This also coincided with one manufacturer 
reducing prices on the less expensive 16:9 sets - pricing to achieve sales in 
volume - so that they became much more competitive against "high end" 4:3 
models. A 28" wide-screen receiver can be bought for ECU 1200 in France. This 
has enabled retailers to convert customers replacing 4:3 sets into 16:9 prospects, 
a task rendered much easier thanks to the presence of broadcasting. Meanwhile, 
larger, high end 16:9 receivers command a premium both for their screen size 
and the heavy digital featuring they carry, which includes 100Hz up conversion 
to reduce flicker and various expansion modes for reprocessing 4:3 pictures into 
16:9. Note that most receivers are sold without integrated D2-MAC decoders 
since these are supplied by pay-TV operators as part of their service. The 
standard is not an issue in France for two reasons: PAL-Plus will not be used 
21 
because SECAM is the existing system; and D2-MAC is the only currently 
available 16:9 system. 
French retailers are now convinced that 16:9 is the future. "The committed 
support of the retail trade is a crucial factor that has been achieved in France", 
according to one industry source, "This only comes about as a result of consumer 
interest because retailers do not waste floor space on products that do not sell or 
are even slow moving". Empirical sampling of the French retail distribution 
network has shown that electrical retailers in provincial France now stock 16:9 
receivers, from Evreux, Normandy, to small bastides in the Perigord. Branches of 
multiple retailers16 in central Paris report an even stronger trend, with up to 10% 
of all receivers sold being 16:9 format.17 Given the strong role of the multiples in 
the value chain that stretches from programme producers via broadcasters and 
manufacturers to the consumer, their enthusiastic participation in the marketing 
of 16:9 cannot be underestimated. A recent catalogue issued by one important 
multiple earned three pages of 16:9 receivers covering ten models, compared 
with five pages devoted to 4:3. It is unlikely that the multiples would have 
supported wide-screen enthusiastically without broadcasting and programmes in 
the volumes made possible by the Action Plan. 
Industry singles out for praise the sole French public broadcaster funded by the 
Action Plan for its wide range of attractive programmes and the volume of 
broadcasting. France Supervision itself considers that the main benefit of the 
Action Plan has been an increase in daily 16:9 output to around nine hours, 
which has made the service more attractive to cable operators, thereby widening 
coverage. France Supervision's 16:9 schedules contain many cinema films and 
sport, considered to be the programmes where the 16:9 format is most attractive. 
Considerable resources have been devoted to promotion. Canal Plus is another 
important broadcaster which also shows many films. Although Canal Plus has 
broadcast the hours allocated, it has not promoted the service as strongly as the 
Commission would have hoped. The intention of replacing D2-MAC decoder 
boxes with digital ones in the near future, at the start of digital services, has acted 
as a brake on their 16:9 effort. The other two French services are thematic and 
widen the choice of services available. Ciné-Cinémas is a film channel. MCM is 
a pan-European music channel, with a young audience for whom 16:9 is 
attractive. 
The importance of cinema films for launching 16:9 is underlined by French 
broadcasters and industry. The "Home Cinema" concept is significant and 16:9 
enables it to evolve one step further towards simulating the cinema experience at 
home. The existence of the French film industry together with the increasing role 
16 Multiple retailers have numerous outlets. Examples are FNAC, Darty (France); Dixons (UK). They 
account for an increasing percentage of sales in the larger Member States. 
17 The Wider View Newsletter, June 1994, published by Vision 1250 
22 
of television finance in funding French feature film production18 means that the 
Action Plan is complementing an existing synergy. French broadcasters have 
reported no difficulty in obtaining 16:9 copies of films unlike broadcasters in 
some other countries with a greater dependence on non-European productions. 
France Supervision's experience also underlines the importance of strongly 
promoting wide-screen services, testifying the importance which the 
Commission has attached to promotion in project evaluations. The thematic 
music service MCM has also undertaken some significant promotions and 
collaborates with other 16:9 broadcasters outside France. 
2.2 Germany: first indications 
Broadcasting of PAL-Plus got off to a good start in 1994. The pay-TV film 
channel Premiere is transmitting a substantial number of 16:9 feature films, using 
the "Home Cinema" concept in its promotion. There are wide-screen "windows" 
established in the prime time schedules of the two national terrestrial 
broadcasters, together with a cable pay-TV film channel, two regional 
broadcasters and a satellite channel. Multiple distribution means that the 
terrestrial services are available on cable and satellite as well. Promotion includes 
a 16:9 logo to identify 16:9 transmissions; the logo is visible to those viewing in 
4:3 and 16:9. 
The Commission has evidence that 16:9 broadcasting in Germany in 1994 has 
raised the confidence of the market actors and enabled broadcasters to confront 
and master the operational realities, both by offering services to the public and 
through promotional effort. This first phase of broadcasting services to the public 
in advance of the Berlin IF A - the consumer electronics show in August 1995 at 
which "PAL-Plus receivers were originally scheduled for commercial launch - can 
therefore be considered as more than just pump-priming activity. 
Industry reacted favourably to the announcement of Action Plan services by 
bringing forward its plans to launch PAL-Plus receivers by six months. One 
manufacturer succeeded in launching receivers a year ahead of schedule in 
September 1994. Three others were also able to put a few thousand receivers on 
to the German and UK markets in order to capitalise on the Christmas trade.19 
These receivers sold out very rapidly, a promising indication of latent demand. 
German sales of wide-screen receivers totalled around 30,000 units in 1994, 
according to an industry estimate, including those equipped to receive PAL-Plus. 
'8 See Jean-Noel Dibie, "La 51ème étoile LEurope de l'audiovisuel", FEMIS, 1992, P.31. 
'9 By configuring semi-custom components ahead of the availability of a specialised PAL Plus 
chipset. This technical approach is more expensive but balanced by the very rapid time-to-market 
achieved in this case. The integrated chipset opens the possibilities for cheap volume production, 
leading to significant cost reductions and price reductions. Integration is the process of replacing 
many discreet components with one or more microchips having the same functionality. 
23 
2.3 Availability of studio equipment 
The Commission has received no indications from Action Plan broadcasters that 
non-availability of 16:9 studio equipment has been a problem. In particular, 
PAL-Plus encoders were available in October and November for those 
broadcasters who had ordered them immediately after the results of Call 94/1 
were made public in June 1994. 
The 1994 International Broadcasting Convention, Amsterdam, revealed a 
comprehensive selection of 16:9 equipment, including 4:3/16:9 switchable CCD 
cameras from European and other manufacturers. 
2.4 Public visibility and press impact 
Public and press reactions to wide-screen 16:9 has been favourable with a 
respectable volume of press articles. Awareness is rather high in France. The 
launch of PAL-Plus broadcasting was marked with press articles in all countries 
where the system is being used. The wider availability of PAL-Plus receivers in 
1995 will trigger further rounds of promotional effort. 
Awareness of the European Union's role in accelerating the 16:9 market has been 
noted by some publications, but the Commission considers that this should have 
a rather higher profile in 1995, as the Action Plan's role becomes more evident. 
The size and inertia of the television receiver market mean that there is a 
considerable lag between funds being committed and market impact being 
achieved. The Commission considers it prudent to await results before promoting 
the Action Plan itself. 
FUTURE PROSPECTS 
As of 1 January 1995, the Action Plan enters a new phase with a number of new 
elements. 
Most significantly, there are three new Member States, bringing with them more 
broadcasters interested in launching 16:9 services. They will be able to apply for 
Call 95/1 in early 1995. As in 1994, this will be a a joint call with the programme 
production and remastering part of the Action Plan. 
3.1 Resource overview 
This year 1995 will also initiate the special funding régime foreseen for Member 
States' markets not fully served in the early stages of the Action Plan20. By 
enabling 80% of the hourly flat rates to be paid - from a reserve of 68 MECU 
established by the Council Decision - this new element should disperse the 
funding on a wider basis and facilitate the fulfilment of the "spread and balance 
20 Paras 5.2.ii and 5.4 of the Annex of Council Decision of 22 July 1993 on an Action Plan for the 
Introduction of Advanced Television Services in Europe. O.J L 196/48, 5.8.1993 
24 
criteria" over the life of the Action Plan. The only drawback is that certain 
broadcasters in some Member States well able to launch services at the 50% rate 
may have delayed their start date in order to benefit from 80% funding. The 
Commission has no hard evidence of the 80% funding having had this effect; but 
if this were true, it would be contrary to the Action Plan's general objective of 
accelerating market development. 
Figure 7 
ALLOCATION OF THE TOTAL ACTION PLAN BUDGET 
HOURS ALLOCATED 1993 AND 1994 
Early Markets 45% 
Early Markets 30% Later Markets 25% 
HOURS TO BE ALLOCATED 1995 AND 19% 
Estimate based on 5 new entrants 1995 and 1996 
The pie chart shows that around 45% of the Action Plan's broadcasting budget 
has already been committed in Calls 1993 and 94/1. This does not mean that the 
impact of this funding has been exhausted in the market to achieve the results 
described above; as one manufacturer describes this, "During the take-off phase, 
the consumption of resources and energy is disproportionately high, compared 
with actual progress achieved". 
Call 94/1 will achieve its greatest impact during 1995. However, implementation 
of the 80% funding will inevitably reduce the number of broadcast hours funded 
by the Action Plan from June 1995. Resources available for broadcasting will be 
the same as for Call 94/1 in money terms, but up to half is reserved for 80% 
funding. Assuming that this funding is fully taken up by a number of eligible 
projects, this will represent a very significant reduction in the resources available 
to the 22 broadcasters currently funded at 50%. In view of the great inertia of 
consumer markets with a high installed base of existing equipment, the 
Commission would ideally have wanted another year of funding at the rate of 
50%o in the driver markets before launching the 80%) régime. 
25 
On the positive side, total European wide-screen receiver sales increased by 72% 
in 1994 compared with 1993. This is excellent news and in large measure due to 
the consumer confidence created by Action Plan broadcasting. However, this 
growth is from a very low level. Industry estimates that only 2.4%) of 1995 
European receiver sales will be 16:9 and this volume is fragmented across a 
number of markets. The wide-screen share of TV receiver sales is currently less 
than 1% in all the large driver markets, except for France. Even in France, wide-
screen penetration of the installed base of TV receivers will only pass 1% in 
1995. This is the minimum threshold for achieving mass-market lift off, 
according to some sources.21 Figure 8 shows the launch trajectories of other 
products for comparison. 
Figure 8 
TEN YEARS OF CONSUMER ELECTRONICS UPTAKE IN EUROPE 
% Household Penetration 
See for instance C. Irwin in Journal of the Royal Television Society, November/December 1988. A 
BBC comparison of the historic penetration curves for monochrome TV, colour TV and 
videorecorders in the UK showed that these products took 8 years to achieve 50% household 
penetration after 1% of households had acquired them. 
26 
3.2 International comparisons 
Compared with the launch curves for other consumer electronics products, 16:9 
is back on track in Europe, but aggregated sales and current penetration should 
provide no grounds for complacency.22 Japanese sales of 16:9 wide-screen sets 
reached 1.5m units in 1994, the breakthrough year for 16:9 in Japan. The 
Japanese had earlier concentrated all their efforts on launching HDTV, until 
Europe introduced 16:9 as an objective in its own right and a necessary precursor 
to the difficult and costly task of introducing HDTV. Japanese manufacturers 
were then quick to reorientate their efforts towards 16:9 during the long gestation 
of the Action Plan.23 
The Japanese introduction of 16:9 has been facilitated by manufacturers' control 
over consumer electronics retail distribution in Japan, long denounced as a non-
tariff barrier by European industry. The vertical integration between 
manufacturers and retail has enabled Japanese manufacturers to introduce 16:9 
without broadcasting. The onerous European task of consolidating retailers' 
confidence in the new format through broadcasting has no equivalent in Japan. 
The introduction of 16:9 in Japan should not therefore be represented as a 
triumph of "market forces", compared with the Action Plan in Europe. Moreover, 
the European approach is more respectful to the consumer since it ensures that 
suitable high quality 16:9 programming is available through broadcast services at 
the outset. Broadcasting using the 16:9 EDTV 2 transmission system24 is 
however expected to start in 1995. 
The United States has made little progress towards introducing 16:9, either with 
standard definition or as HDTV. Despite the high level of publicity generated 
previously by the Grand Alliance digital HDTV transmission system, no US 
broadcaster is planning to introduce HDTV services. System testing is still in 
progress, but terrestrial broadcasters are focusing on other service possibilities -
notably the possibility of using digital compression to provide more programmes 
in standard definition or even telecommunications services - for the extra channel 
originally offered for HDTV by the Federal Communications Commission.25 
"Experience curves" calculated for previous consumer electronics products suggests that prices 
decline between 15% and 35% each time the cumulative manufacturing volume doubles. Volume, 
cost and price are therefore closely linked. For 16:9 Cathode Ray Tube displays, cost reductions 
will accumulate across all receivers manufactured, whatever the transmission system. 
According to a Japanese source, "HDTV itself is not good business until now, but it has made the 
foundation for today's 16:9 market". 
EDTV 2 is a compatible upgrade to the existing 525 line NTSC system used in USA and Japan. Its 
technical approach is comparable to PAL-Plus. 
DirecTV has already started transmitting 150 channels of digital television in 4:3 format by 
satellite. The intention is to compete with cable TV as a delivery mechanism. It has the capability 
to transmit 16:9, a built-in parameter of the globally-agreed MPEG digital video and audio 
compression systems. The digital broadcasting systems to be used in Europe and USA and Asia all 
feature MPEG. 
27 
Tremendous market potential exists for introducing 16:9, but it will probably be 
necessary for Americans to establish 16:9 outside the HDTV context, if this 
potential is to be realised in the short to medium term. 
3.3 16:9 analogue 
It is clear that those Action Plan broadcasters using D2-MAC have been able to 
introduce and develop 16:9 services by satellite and cable without any of the 
birth pains associated with new systems. D2-MAC decoders are normally made 
available by the service provider separately from the 16:9 television receiver 
itself. This will facilitate migration to digital at some point in future since only 
the decoder will need to be replaced by the service provider. Meanwhile, D2-
MAC broadcasters will continue to make considerable progress in developing 
their 16:9 audiences. 
The year 1995 will be important for PAL-Plus services since receivers will 
become generally available. Prior to, and following, the Berlin IFA show, it will 
be important to increase hours of broadcasting in Germany and to monitor the 
uptake of receivers by the German retail distribution network. The importance of 
the German market is twofold. First, it is the largest consumer electronics market 
in Europe and a driver for the whole Union. This has been emphasised by several 
industry contributions, which stress the importance of the Single Market for 16:9 
equipment, however fragmented the broadcasting and production markets may 
be. 
Favourable development of the German market is therefore a condition for the 
success of the 16:9 format in Europe. This is quite independent of the 
transmission system used. However, Germany is also the cradle for PAL-Plus, 
the system selected by the majority of Action Plan broadcasters so far. A 
successful launch for PAL-Plus in Germany will certainly contribute to the 
success of PAL-Plus elsewhere. 
Industry has already demonstrated a willing response to the Action Plan by 
bringing PAL-Plus receivers to market ahead of the target set for the Berlin IFA 
show in August 1995. Availability of the first generation PAL-Plus integrated 
chipset is tied to large-scale mass distribution following this event. The 
Commission has received information that three companies are planning second 
generation silicone by the end of 1996. These are major investments and will be 
a key indicator for PAL-Plus and the expansion of the installed base of 16:9 
receivers. 
3.4 16:9 digital 
The year 1995 may also see the first digital 16:9 service proposals able to have 
an impact on the market being proposed for Action Plan funding. The European 
Digital Video Broadcasting Group has defined specifications for satellite and 
cable transmission and these are now ETSI standards and have achieved global 
recognition as ITU Recommendations. Several broadcasters have been 
investigating prices for bulk acquisition of decoders. Moreover, certain 
28 
ib submissions to the Commission's request for feedback on the first year of the 
Action Plan underline the important benefits that 16:9 could bring to digital 
services. 
There is a risk of confusion here; if competing broadcasters start to claim that 
one technical approach is superior to the other. The Commission will uphold the 
generic approach to 16:9 set out in the Council Decision, that the screen format is 
independent of the technology used to deliver the service, and to encourage 
Action Plan broadcasters to adopt a positive approach in their promotion. The 
Commission takes the view that analogue services will continue to be transmitted 
for fifteen to twenty years26. In particular, PAL-Plus is a logical extension of 
existing PAL services via integrated receivers. Digital television represents the 
future of television broadcasting and will start soon on a limited scale, probably 
for Pay-TV services delivered by satellite and cable to outboard decoder boxes. 
These will be new services starting with audiences of zero; the circumstances are 
therefore very different. The choice lies with broadcasters; their strategies will 
differ according to current circumstances and future objectives. 
For a discussion of the issues relating to the transition to digital television, see Communication 
from the Commission to the Council and the European Parliament on Digital Video Broadcasting, 
COM (93) 557 final, 17 November 1993, especially pp 11-14 and Part 3, A Framework for 
Community Policy. 
29 
SECTION B: PRODUCTION AND CONVERSION OF PROGRAMMES 
1. INTRODUCTION 
1.1 The Action Plan, an integral part of the European Union's audiovisual 
policy 
1.1.1 The challenges of the new technologies 
The introduction of new technologies cuts across the audiovisual sector who is 
facing two challenges - one quantitative, the other qualitative. In response to the 
emergence of new cable and satellite broadcasting services and the new 
requirements resulting from the advent of the Information Society, European 
producers will have to make many more programmes in order to meet the 
increase in the demand, otherwise non-European countries seeking to conquer 
world markets will strengthen their positions on the Community market and 
restrict the variety of audiovisual programmes. The audiovisual industry will 
also have to prepare itself for the digital revolution and a new generation of 
television and new advanced television services. 
1.1.2 The existing instruments of European Union audiovisual policy 
As part of its audiovisual policy, the European Union has developed a strategy to 
increase the competitiveness of the audiovisual sector and has two instruments 
designed to meet the challenges involved. The aim of the MEDIA programme is 
to improve the content and expand the number of European programmes, placing 
the emphasis on the pre-production and distribution of films and TV 
programmes. The aim of the 16:9 action plan is to encourage the introduction of 
new television services in Europe on the assumption that "the success or failure 
of the new television technologies will be determined by the availability of 
programmes for broadcasting using the new television standards",27 the 
availability of programmes for viewers being, at the start of the broadcasting 
service chain, a source of legitimacy for television services since viewer choice 
is based on the content of the services. Further along the chain, broadcasters also 
stand or fall by their programmes since, in choosing whether or not to watch 
them, the viewers endorse or reject the services which broadcast them. 
Consequently, with a view to supplying the new 16:9 services which the 
European Union wishes to promote on a Community scale, the Action Plan 
encourages the development of new programmes on production media 
compatible with the 16:9 format, while ensuring that existing and current 
programmes can continue to be broadcast in the new format. 
27 Recital A of European Parliament Resolution A3-0389/92 on encouraging audiovisual 
production in the context of the strategy for high-definition television (OJ C 42/1993; p. 
209). 
30 
1.1.3 Encouraging the programme industry to use production media 
compatible with the 16:9 format for new productions 
The 16:9 Action Plan is an integral part of the European Union's audiovisual 
policy which set out clearly the strategic objectives for the Community 
programme industry in the Green Paper.28 Europe is not making the most of its 
cultural diversity, where the audiovisual sector is concerned, and it is a victim 
of its differences. The dispersion of production and distribution units makes it 
difficult for the sector to become more competitive and build up audiovisual 
catalogues which will play a vital role in relation to the "content" circulating on 
the networks of the Information Society. 
The audiovisual catalogue is based to a large extent on stock programmes, which 
have two features: they can be reprogrammed and they can be used on markets 
other than their market "of origin" and on various media. With a shelf life of 
several years, they can be broadcast several times and circulate in different 
markets, generating operating revenue. Documentaries and drama are good 
examples. Stock programmes are a lasting and regular part of the activity of 
production companies provided that they hold the rights to use the programmes 
in question. In this respect, they form an audiovisual catalogue which is an 
economic asset for the programme industry. 
In this context, the 16:9 Action Plan encourages European producers 
systematically to use production media compatible with the 16:9 format and with 
a technical quality which makes it possible to prolong the shelf life of stock 
programmes in order to build up high-quality audiovisual catalogues. A 
catalogue also needs to have a sufficient number of programmes in order to 
ensure that it is worthy of the name given "the fundamental importance of 
production of stock programmes in the context of a forward-looking programme 
policy".29 It will take some time to achieve this objective, which is one reason 
why the Action Plan seeks to upgrade the existing catalogue by providing for a 
financial contribution for the remastering of programmes. 
1.1.4 Remastering or prolonging the shelf life of existing catalogues 
Remastering means putting an existing programme (e.g. in 35 mm) on a video 
medium (either 625 or 1250 lines) or another medium enabling it to be broadcast 
in 16: 9 format. Remastering is a complex technical operation calling for 
adjustment of the film on the original medium before transfer to the new 
analogue or digital master. At the end of this operation, programmes on a digital 
support are suitable for all types of broadcasting and use which this format 
makes possible. 
Strategy options to strengthen the European programme industry in the context of the 
audiovisual policy of the European Union - Green Paper (COM(94) 96 final of 
6 April 1994). 
Point 7 of the European Parliament Resolution - see footnote 27. 
31 
1.1.5 Flow programmes 
The programme section of the Action Plan also encourages the production of 
flow programmes (live recordings, sporting events, etc.) which are liable to 
attract a large number of viewers, especially in the case of major sporting events, 
and thus helps to arouse consumers' interest in acquiring new 16:9 televisions. 
The impact of these programmes, which are for the most part broadcast live, is 
all the greater in that the high-quality pictures and sound associated with the 16:9 
format add extra gloss to their "big-event" nature. 
The broadcasters' decision to offer more and more flow programmes in 16:9 can 
be seen as an indication that they have accepted this new format.30 
1.1.6 Generalization of 16:9 services 
The Action Plan therefore seeks to encourage technological adjustment by 
producers as a result of cost-effective investment in the television of the future 
since "the field of programmes is currently the weakest element in comparison 
with those of technology and broadcasting standards, but it is necessary to further 
the interests of all fields by coordinated and synchronized action".31 
Coordination and synchronization with the broadcasting sector are organized 
within the Community programme itself. The Action Plan's approach - an 
original one - of establishing a link between the two ends of the broadcasting 
chain encourages producers and broadcasters to work together during the pump-
priming phase for the 16:9 market. Subsequently, measures in relation to stock 
programmes, which are by definition programmes which will circulate, will 
make it possible to achieve an adequate volume of 16:9- compatible 
programmes to promote the generalization of 16:9 services beyond those 
supported by the European Union under the action plan. 
1.2 Promoting 16:9: consistency of Community measures 
1.2.1 The link between the production and broadcasting of programmes in 
16:9 
in order to obtain a financial contribution in respect of the production or 
remastering of programmes, programme producers must agree to broadcast the 
programmes in question in 16:9, i.e. the Action Plan makes the granting of 
contributions subject to a duty to achieve a given result, namely broadcasting in 
16:9. 
30 See also Section 3.1.1. 
Recital B of the European Parliament Resolution - see footnote 27. 
32 
1.2.2 Mobilizing the economic operators 
The method of allocating the Community aid is original and is by no means a 
sectoral subsidy. As the Action Plan has the strategic structural objective of 
promoting the 16:9 market, the method chosen is based on the joint financing of 
new technological investments. The additional technical costs generated by 
shooting, post-production and broadcasting in 16:9 are shared between the 
European Union and the non-Community parties in order to maximize the impact 
of the Community assistance on the programme market. 
During the launch phase for the 16:9 market, efforts must be made to involve all 
those with a commercial interest in the new technologies (chiefly the 
broadcasters and producers but also the cable operators, satellite operators, 
equipment manufacturers, banks, communication groups, and the public sector). 
This launch phase entails large-scale initial investment before economies of 
scale, a degree of autonomy and financial profitability are attained. The 
Commission is therefore directly involved in the launch phase, but together with 
those who will be able to take over the reins when the objectives are achieved. 
The mobilization of non-Community financial resources is a precondition for 
financial assistance from the Community, but also a means of ensuring the 
widespread dissemination of information on the 16:9 Action Plan so that all 
potential sector operators are reached. 
In addition, "this prior commitment of funds will be seen as an essential 
validation of the value of the project"32 and is therefore the only factor in the 
qualitative assessment of new projects, since financial assistance from the 
European Community is based on objective eligibility criteria which do not take 
programme quality into account. Use of the 16:9 format is in itself already an 
indication of quality. 
1.2.3 The impact of the Action Plan on the industry 
The impact of the Action Plan derives from the specific growth potential in the 
audiovisual industry and its influence on related sectors. The new television 
services constitute a strategic industry with an enormous potential for growth and 
technological development. Europe's investment strategy in these areas will 
generate considerable economic benefit. 
The Action Plan is of paramount importance to the consumer electronics 
industry,33 and one of the anticipated effects of the Action Plan is that it will have 
a knock-on effect in this sector of industry. For each ecu of Community aid a 
number of ecus will be invested by the sector to meet a new demand for 
33 Council Decision, Annex, point 4(i). 
"The Community ... recognized the strategic importance of HDTV for the consumer 
electronics industry" - first recital of the Council Decision. 
33 
34 
36 
37 consumer and professional equipment generated by the offer of the provision of 
16:9 services, since "no funding will be devoted to support manufacturers of 
receiver equipment for consumers".34 Professionals will have to procure the new 
equipment of their choice (16:9 cameras) and the public can purchase new 
television sets,35 and decoders to receive the new high-quality television services. 
THE RESULTS OF A SECTORAL FINANCIAL STRATEGY 
2.1 Community aid 
Financial contributions are granted on the basis of calls for proposals published 
in the Official Journal of the European Communities.36 Applications for 
contributions are sent in on forms published and updated for each call. They are 
systematically forwarded to the correspondents for the professional circles and 
are available on request from the Commission. 
Financing takes the form of an ad hoc sectoral financial contribution based on 
flat rates per hour of programme. 
2.1.1 Joint financing of the additional cost 
The principle of sharing the additional cost between the European Union and the 
non-Community sector is designed to increase the involvement of economic 
operators. According to the rule applied uniformly until 1 January 1995, at least 
50% of the non-Community funding must come from economic operators and 
not public resources. 
2.1.2 Scale of flat rates 
The principle underlying the assistance is that, on the basis of a production 
proposal, the Community aid covers half of the additional cost, the maximum 
amount of which is determined in advance on the basis of flat rates per hour set 
by the Commission after consulting the Committee of Member States' 
Representatives in accordance with the procedures adopted.37 These rates 
represent the ceiling for assistance per hour of programme submitted to the 
Commission. 
Last paragraph of Article 1 of the Council Decision. 
"The Action Plan will contribute to market penetration by receiver equipment in the 16:9 
format" - Article 1 of the Council Decision. 
The Annex to the Council Decision sets out the implementation procedures for the Action 
Plan. A joint services-programmes call plus two calls solely for programmes have been 
issued over a 12-month period. 
Articles 3 and 4 of the Council Decision. 
3l) 
40 34 
The scale of additional technical costs is based on actual production costs. 1250-
line video production has the highest hourly rate: ECU 60 000, compared with 
ECU 30 000 for 35 mm production, and ECU 12 000 for super 16 mm and 625-
line video. The Action Plan rates initially set in the Council Decision have been 
adjusted to take account of actual costs.38 If the additional cost is lower than the 
flat rate, the Community financial contribution must not exceed 50% of the 
additional cost reported by the applicant. 
Where remastering is concerned, the "additional cost" consists of the costs of 
manufacturing a new medium. Remastering to a 1250-line medium39 qualifies 
for a rate of ECU 5 000 and remastering to a 625-line medium40 qualifies for a 
rateofECU3 000. 
Distinction between stock programmes and flow programmes 
When the rates were altered, a distinction was made between stock programmes 
and flow programmes, and this has applied since the second call for proposals in 
order to reflect the actual costs more correctly, since a stock programme requires 
more complex and expensive shooting and post-production than most flow 
programmes. 
While the flat rates in force for flow programmes are suitable for ordinary live 
programmes, they are unsuitable for the coverage of major sport events such as 
finals, Olympic Games and world championships in view of the considerable 
expense involved with this type of production. The Committee of Member States' 
Representatives is aware of this, and has indicated that it wishes to provide 
support in respect of the 1996 Atlanta Olympic Games as was the case with the 
1994 Lillehammer Winter Olympics. 
2.1.3 Allocation of Community aid 
To be eligible, projects have to meet the criteria deriving from the Action Plan. 
There are three objective conditions: 
The table of production costs in the Council Decision was amended following the first call 
for proposals, as provided for in point (vi) of Section 4 (the funding approach) of the Annex 
to the Decision. Originally, there was only a distinction between 1250-line video/35 mm 
and 625-line video/super 16 programmes. See Figures IB and 1C in the General 
Introduction. 
Given that there are no 1250-line broadcasting services at present, this is a theoretical rate. 
The average cost of remastering, on the basis of supporting documents provided by 
recipients, on a digital 625-line video medium is as follows: for a lh30 film, digital Dl 
(Home Cinema) costs between ECU 1 500 and 2 000 (figures provided by one of the biggest 
European laboratories) for a total remastering cost of approximately ECU 3 000. The flat 
rates of the Action Plan therefore correspond to the digital remastering costs, and encourage 
producers to invest in a medium which is highly profitable in all its potential uses. 
35 
- producers of new programmes have to be established in one of the European 
Union Member States, 
- a 16:9 broadcaster established in the European Union has to undertake to 
broadcast the programme, 
- joint financing must be provided from sources other than the Action Plan. 
Only rights holders can apply for a financial contribution for the remastering of 
programmes. Moreover, the granting of aid for remastering is conditional upon 
the transmission of the programmes in question by means of a 16:9 service 
receiving aid under the Action Plan. 
If too many proposals are received compared with the budget available, 
preference may be given to projects: 
- submitted by producers in Member States with a low production capacity or 
whose language covers a limited area, 
-• submitted by independent producers, 
-• where the matching funds come exclusively from economic operators. 
In the case of the remastering of existing programmes, priority is given to 
European programmes. 
These criteria strengthen the structural objectives of the Action Plan and 
guarantee its effectiveness and relevance. As a result of them, the success that the 
Action Plan has had with producers is thus geared to the desired objectives and 
maximizes its impact. 
2.2. The overall results, expressed in hours and ECU 
2.2.1 Situation as at 31 December 1994 
The total Community aid granted amounts to ECU 64 million on the basis of 
three calls for proposals.41 Of these ECU 64 million, 40 million were for the 
production of new programmes and 24 million for the remastering of 
programmes. 
These ECU 64 million co-financed a total of 13 200 hours, as follows: 
Calls 1/93 published on 1 September 1993, 1/94 published on 1 February 1994 and 2/94 
published on 1 July 1994. 
36 
Figure 9 
Call for proposals Hours of programmes financed Community aid 
(in ECU) 
Call 1/93 2 900 hours 11.6 million 
Call 1/94 4 700 hours 19.4 million 
Call 2/94 * 5 600 hours 33 million 
Figure 10 
6000 
5000 
4000 
3000 
2000 
1000 Total number of hours funded per Call of Proposals 
Call 1/93 Call 1/94 Call 2/94 
37 
Figure 11 
Total amount of funding per Call of Proposals (in MECU) 
35 
30 
25 
20 
15 
10 
5 
Call 1/93 Call 1/94 Call 2/94 
These figures illustrate the increasing effectiveness of the Action Plan. The first 
call for proposals made it possible to test the market and make the various parties 
in the sector aware of the Action Plan which, it should be repeated, is not just a 
source of funding for an audiovisual production sector with limited finances but, 
and especially, a means of developing a 16:9 market which existed only in an 
embryonic form. 
The total number of hours breaks down as follows: 7 600 for new programmes 
and 5 600 for remastered programmes. For the first three calls for proposal, 60% 
of the total hours for new productions concern flow programmes and 40% stock 
programmes. 
Let us now examine how the Community aid breaks down between broadcasters 
and independent producers. 
38 
2.2.2 Choice of investment by the two main types of parties involved 
The breakdown for recipients of aid for new programmes is as follows: 
Figure 12 
Call 
Call 
' 1/93 
! 
1/94 
1 2/94 ^ 
L 1 Expressed in numbers of hours 
Broadcasters 
63% 
78% 
56% Independent 
producers 
37% 
22% 
44% Expressed in ECU 
Broadcasters 
63% 
63% 
53% Independent 
producers 
37% 
37% 
47% 
Fisure 13 
20.00 
1800 
1600 
1400 
1200 
1000 
800 
600 
400 
200 
0 Breakdown in hours of new productions per beneficiary 
Call 1/93 Call 1/94 Call 2/94 Indep. Producers 
Broadcasters 
Figure 14 
Breakdown in MECU of new productions per beneficiary 
16 
14 
12 
10 
8 
Call 1/93 Call 1/94 Call 2/94 
42 Where the broadcasters are concerned, the Action Plan plays a considerable role 
since they are helped both as broadcasters and as programme producers. After 
the first three calls, on average they account for two-thirds of new 16:9 
productions, but only 60% of Community aid.42 Their new productions are 
two-thirds flow programmes and one-third stock programmes. 
A distinction should be made between 16:9 broadcasters who already had 
services in place when the Action Plan came into force and those who were not 
then broadcasting in that format. The pioneers43 of 16:9 immediately benefited 
from the Action Plan and were therefore able to fill their programme schedules 
with flow programmes. 
The broadcasters who entered the 16:9 market later44 broadcasted only a few 
hours per day to begin with and started by broadcasting remastered films in order 
to start filling their programme schedule almost immediately using the existing 
catalogue, before broadcasting new programmes. Their image subsequently 
developed and they became more competitive. As the demand for the production 
This is due to the fact that the stock programmes, for which the rate of assistance is higher, 
are to a large extent submitted by independent producers. 
43 Three channels in France and one in the Netherlands. 
44 E.g. Channel Four, ARD, ZDF and RTBF. 
40 
of flow programmes grew, the range of programmes became more varied and 
optimum ratings were ensured. 
The theme channels45 and certain pay-TV channels are rather special cases given 
that their audience is more targeted and liable to act as pioneers by being the first 
to invest in new television sets. 
The independent producers are working with the broadcasters to implement the 
Action Plan which is designed to strengthen this sector of production, a source of 
European audiovisual creativity. The first results are encouraging: 
- the breakdown of production of new programmes between broadcasters and 
independent producers is tilting in favour of the latter, 
- the independent producers have mainly produced stock programmes (94% of 
the total number of hours). The greater priority given to the stock programmes in 
the hourly rates works in favour of the independent producers. 
The Action Plan is a genuine decision-making aid since the investment required 
for technological upgrading would often have been out of the question without 
the Commission's contribution given that the companies in question are often 
small and their finances are limited. An examination of the contributions from 
economic operators indicates that in the majority of cases the independent 
producers use their own funds to finance the additional cost of 16:9. They also 
sometimes call upon the industry, i.e. the broadcasters. 
Apart from the strategic sectoral aspects, the Action Plan has had very favourable 
reactions from audiovisual professionals (cameramen, sound engineers, editors) 
who are very enthusiasic about working in 16:9 which has revamped and 
enhanced their craft. The European Commission has recieved several comments 
along these lines. The high image resolution, the great sound quality, the 
realistic colour, and the new image adjustment necessitated by the new format 
prompt audiovisual programme producers to go in for high-quality production 
techniques hitherto reserved for the cinema. 
45 E.g. the music channel MCM. 
41 
3. THE EFFECTS OF THE ACTION PLAN 
The objectives of the Action Plan are to achieve a sufficient volume of 
programming in Europe and to develop the consumer electronics equipment 
market there. 
3.1 The programmes, a qualitative evaluation 
Let us first examine the breakdown of the 13 200 hours of programmes for which 
a financial contribution had been allocated by 31 December 1994 (7 600 hours of 
new programmes and 5 600 hours of remastered programmes) before considering 
the geographical distribution of the recipients. 
In order to get a clearer idea of the allocation of the financial contributions to 
new productions, various categories of programmes have been established and 
applicants have to indicate the category to which their programme belongs, i.e. 
drama, documentary, cartoon, cultural event, sport, live recording. An additional 
analysis can be carried out by production formal. 
3.1.1 Breakdown of hours of programmes supported by programme category 
igure 15 
New productions funded : breakdown per type of production in % (hours) 
• Call 1/93 . .'". Call 1/94 IÎ3 Call 2/94 
50 
45 
40 
35 
30 
25 
20 
15 
10 I I 
Drama L;.i„: 
Documentary Cartoon Sport Cultural Event Live Recording 
If we examine the results expressed in terms of numbers of hours, sport and live 
recordings are the main categories. These two categories consist of flow 
programmes. After a peak as a result of the coverage of the Lillehammer Winter 
Olympics, sport on average accounts for 30% of new-programme hours. This 
46 42 
high figure reflects sport's leading place in the ratings in most European 
countries, taking all the channels together.46 
The broadcasters are almost exclusively produced responsible for the production 
of these programmes, accounting for 96% of the hours. 
Two categories have been stable since the beginning of the Action Plan, each 
representing some 10 and 12% of the total programme hours, namely drama and 
cultural events. While independent producers produce the vast majority of hours 
of drama (88%) the broadcasters produce most of the cultural events programmes 
(82%). 
It is interesting that the producers of some of the most popular drama 
programmes (e.g. 'Maigret' and 'Tatort') have taken the initiative of producing 
these programmes in the 16:9 format. The new Belgian television series 'Le 
chagrin des beiges', produced in 16:9, a Belgian-French-Dutch co-production, 
had excellent ratings when screened in Belgium in December 1994 (22.5% 
market share). The success of these quality programmes with the European 
public is encouraging. 
Where the cultural events category is concerned, the Action Plan has provided 
support for prestigious productions in the HD 1250-line format (e.g. classical 
music concerts and ballets). 
The increase in the production of documentaries gives grounds for satisfaction 
where the Action Plan is concerned. A symbol of audiovisual creativity, 
documentaries have been steadily expanding: from 11% they now account for 
some 20% of new-programme hours. Documentaries constitute the hard core of 
the European audiovisual catalogue with a long shelf life. In addition, it is 
interesting to note that documentaries are mainly produced by independent 
producers (78% of total hours) and that they represent half of their production 
funded by the Action Plan (23% under call 1/93 and 51% under call 1/94). The 
topics for the documentaries are often cultural (architectural and artistic 
heritage). The quality of 16:9 is fundamental to these European and international 
scale projects great cultural value. 
In Germany in the first half of 1994 the five best audience figures were for football matches 
(approximately 19 million viewers watched the World Cup matches). In 1993, without the 
influence of the World Cup, sport was in sixth position (14.8 million viewers) after an 
American feature film and a German TV series. 
In France in 1993 the European Cup football matches also occupied the first and second 
positions in the ratings (34 and 33 million spectators respectively) followed by two feature 
films (one American and one French). 
In Spain in 1993 football was also ahead in the ratings followed by political debates and 
variety programmes. 
Sources: EU TELEVISIONS of 12 January 1994, 3 February 1994 and 16 March 1994. 
43 
On the other hand, there is a virtual absence of cartoons as they are very 
expensive to make and the aid procedures of the Action Plan do not seem to offer 
sufficiently attractive incentives. 
In the light of these results, it would seem that the distribution of roles between 
independent producers and broadcasters is balanced. The stock programmes are 
produced by independent producers which the European Union's audiovisual 
policy wishes to defend and make more competitive. The flow programmes, 
which attract a large audience are produced by the broadcasters, who pursue a 
strategy of trying to increase their ratings and winning over their audience by 
broadcasting major world events. 
3.1.2 Breakdown of hours of programmes supported in financial terms 
An examination of the breakdown of categories expressed in ECU gives a 
different result since the amount of aid allocated derives automatically from two 
factors (production medium and flow or stock classification), as explained earlier 
in connection with the flat rates. Sport and live recordings account for only 36% 
of the Community aid. Where these categories are concerned, the impact of the 
Community financial contribution is reflected more in terms of hours than in 
financial terms. 
On the other hand, the marginal effectiveness of Commission assistance is 
greater for cultural events programmes and documentaries, for which the 
production costs are very high. While, proportionally, Community aid is greater 
for documentaries than for sports programmes, the initial investment will be 
recovered to a large extent since a stock programme is liable to be broadcast 
several times and sold on the European and world market. As a result of this 
snowball effect, the Action Plan acts as a springboard for Community investment 
in 16:9 productions 
3.1.3 Analysis by format 
There are four production formats which are compatible with broadcasting in 
16:9 and regarded as eligible under the Action Plan, namely super 16 mm, 
35 mm. 16:9 format 625-line video and 1250 - (i.e. high definition) video. 
44 
Figure 16 
New productions funded : breakdown per format in % (hours) 
Call 1/93 J Call 1/94 il Call 2/94 
70 
60 
50 
j 40 
! 
j 20 
I 0 ttS3. 
Super 16 mm 35 mm Video 625 Video 1250 
Super 16 mm has maintained its starting position with on average 11% of 
programmes, and 35 mm has failed to break through and has to content itself 
with only 4%. confirming that programme producers have not resurrected this 
format in the European programme industry (the situation in the United States is 
quite different; there 35 mm was never abandoned in favour of cheaper 
production formats). This particular format, which is used especially for the 
production of films shown first of all in the cinema, is among the most "future-
proof in view of its high resolution; however, European television producers 
have abandoned it and do not seem prepared to return to it, preferring instead the 
1250-line HD format for their prestigious productions. 
The main beneficiary of the introduction of the 16:9 format is undoubtedly 625-
line 16:9 video. Programmes made in this format account on average for two-
thirds of the contributions allocated. 
1250-line HD video is becoming increasingly successful and now accounts on 
average for one-quarter of all the programme hours for which financial aid has 
been granted. 
If we examine the choice of production formats according to the origin of the 
various productions, the situation is quite different. The independent producers 
use the entire range of formats: one-third of productions being 1250-line video, 
one-quarter 625-line video, one-quarter super 16 mm and the rest 35 mm (10%). 
Broadcasters, on the other hand, are less eclectic in their choice and 
overwhelmingly prefer 625-line video (83%) without excluding 1250-line video 
entirely (12%). 625-line video is therefore for the most part a production 
45 
medium for flow programmes while super 16, HD video, and 35 mm are used for 
stock programmes. 
3.1.4 Remastering programmes and prolonging the shelf life of the 
audiovisual catalogue 
Two-thirds of the remastered programmes are existing ones, confirming the 
"asset" investment role of remastering since, in asking for the programmes to be 
converted, producers are investing in the future. They are sure of improving 
their financial position which, without this investment, would be jeopardized by 
audiovisual supports not geared to the future. 
Figure 17 
34 
32 
30 
28 
26 
24 
22 
20 
18 
16 
14 
12 
10 Total funding of productions : breakdown New productions / Conversions 
(in MECU) 
New productions Conversions 
Call 1/93 Call 1/94 Call 2/94 
46 
Figure 18 
Productions funded : breakdown New Productions / Conversions in hours 
H New productions : Conversions 
3500 
'i'jOû 
2500 
: )00 
1 ( »00 
500 
0 
Call 1/93 Call 1/94 Call 2/94 
3.1.5 The geographical distribution of recipients 
The situation was very imbalanced after the first call for proposals, favouring the 
pioneering countries in the sector - as explained above - but it is quickly 
stabilizing and the new 16:9 market entrants have steadily increased the number 
of programmes made in 16:9. As a result, programme producers in Germany, 
which were virtually unrepresented following the first call for proposals, were 
allocated a large number of programme hours in the following calls. However, 
so far no producers in Italy, Ireland or Luxembourg have applied for aid under 
the Action Plan. 
3.2 The impact of the Action Plan: developing the equipment market and 
the audiovisual catalogue 
3.2.1 The equipment market 
After 18 months in operation, the objectives of the Action Plan have been 
realized and the long-term overall strategy has paid off. The Action Plan's 
knock-on effect on the TV-set market - as described in section 1 - and on the 
professional equipment market has been favourable. 
For example, sales of switchable 4:3/16:9 studio and outside broadcast cameras 
took off from virtually zero in 1993 to half of all camera sales in 1994. The 
average price of a switchable 4:3/16:9 camera is ECU 54 000, representing an 
47 
additional cost of 20% compared with 4:3 cameras. The only reason to invest in 
a 16:9 camera with a useful life often years is the certainty of buying equipment 
capable of adapting to future technological changes. While the camera market is 
regarded as stable in Europe (the industry forecasts an increase of around 5% 
over the next ten years),47 the volume of sales of 16:9 cameras is on the increase, 
indicating anticipatory renewal of professional equipment. The impact of the 
Action Plan is therefore reflected in the swift reorientation of the professional 
camera market to 16:9 cameras. 
3.2.2 The 16:9 audiovisual catalogue 
The audiovisual catalogue covered by the Action Plan comprises remastered 
films and stock programmes. 
So far, the vast majority of the 5 500 hours of remastered programmes are 
available in digital format. 
in the new-programme category, the split between stock programmes and flow 
programmes is stable. By 31 December 1994, 2 800 hours of stock programmes 
had been supported. The Commission's desire to encourage the production of 
stock programmes has produced results which are likely to get even better during 
the rest of the lifetime of the Action Plan. 
Figure 19 
Productions funded : breakdown Stock / Flow in % (hours) 
• Stock Flow 
70 
60 
50 
40 
30 
20 
10 
0 
Call 1/93 Call 1/94 Call 2/94 
47 According to figures provided by Thomson's sales management. 
48 
JOINT CONCLUSIONS 
Programme Production and Conversion 
For the time being only preliminary conclusions can be drawn with regard to the 
performance of the Action Plan. Nevertheless, it can be concluded that: 
• the Action Plan has made it possible to inform programme producers and 
broadcasters in Europe about the new technologies and the new generation 
of television. They have been encouraged to think European. The 
circulation of programmes in Europe is a crucial matter in a market where 
programmes are still very few and far inbetween in some countries; 
• the independent production sector is showing encouraging signs of 
development; 
• the European Union's contribution has helped to arouse the interest of and 
obtain support from economic operators, opening up other sources of 
funding. 
However, the independent producers are still in a difficult economic position and 
their cash flow is often subject to constraints which make Community aid vital. 
Community measures to reinforce the diversity of this sector must go hand in 
hand with structural reinforcement. 
These conclusions raise the question of how to make the most of the Action Plan. 
Certain conclusions could culminate in concrete proposals. How can the 16:9 
market parties easily be brought into communication in order to enable the 
European Union to pool skills and transfer know-how? 
Certain 16:9 services in small countries with a limited audiovisual capacity 
sometimes find it difficult to obtain programmes in 16:9 because right from the 
start they do not have the financial capacity to co-produce programmes and find 
it difficult to fulfil their obligations to broadcast in 16:9. 
On the basis of a questionnaire drawn up after examining the applications for 
contributions, starting in March 1995 the European Commission will be 
compiling a simple database indicating all the European programmes available in 
16:9 and specifying, for each programme, the rights holder in each country, the 
types of rights (cable, satellite, terrestrial) and their running times, original 
language, and the versions available. This database will be available on the 
Internet and can be consulted by anyone who needs such information simply by 
accessing the World Wide Web. 
The Action Plan has proved to be part and parcel of the tactics of the 16:9 market 
players and a component of their overall strategy enabling them to address the 
future development of European audiovisual catalogues. 
49 
Broadcasting 
From a supply side perspective, the achievement of 22 services in eight Member 
States testifies to the interest of the broadcasters and their willingness to 
participate in offering 16:9 to the public under the conditions set out in the 
Council's Decision. It is however too early to assess the impact of Action Plan 
broadcast funding. There is a lag between the time when broadcast funding is 
committed and when it affects the market. The impact on the consumer 
electronics market should become evident towards the end of 1995 and the first 
quarter of 1996. By then new technologies will probably be available in the 
market, further increasing the range of services available in 16:9. The formal end 
of the Action Plan on June 30 1997 will also be looming by then, perhaps 
suggesting that four years was too short a duration for the magnitude of the task. 
The new Member States in particular will have but a brief opportunity to benefit 
from the Action Plan. In addition, the extent of the Action Plan's capability to 
achieve market impact will have been reduced by the 80% funding provision; 
this will cut back the number of hours of broadcasting. 
The Commission considers the introduction of the 16:9 format to be a strategic 
element which the audiovisual and consumer electronics market actors can offer 
the public in the convergent future of the Information Society, rich in new 
services and products. In particular, it reflects the long-standing convergence 
between cinema and television. The 16:9 format is therefore comparable with 
other important elements contributed by market actors in the telecommunications 
and computing industries. Consequently, the Action Plan is of continuing 
strategic importance for market actors in the audiovisual and consumer 
electronics industries. The Commission looks forward to its next opportunity to 
report on progress to the Council and to the European Parliament. 
50 
ANNEX 
Supplementary tables for Section B 
Table 1 
Total number of hours funded : breakdown of new productions per 
type of programme 
iType of 
programmes 
1 
Drama 
Documentary 
Cartoon 
Sport 
Cultural Event 
Live Recording 
Total number 
of hours funded Call 1/93 
in hours 
165 
193 
0,3 
613 
231 
467 
1669.3 % 
10 
12 
0 
37 
14 
28 
100 Call 1/94 
in hours 
202 
J4O 
23 
471 
293 
1158 
2490 % 
8 
14 
1 
19 
12 
47 
100 Call 2/94 
in hours 
322 
849 
19 
1005 
402 
822 
3419 % 
9 
25 
1 
29 
12 
24 
100 Total hours : 
1/93+1/94+2/94 
689 
1385 
42,3 
2089 
926 
2447 
7578.3 % 
9 
18 
1 
28 
12 
32 
100 
51 
Table 2 
Total number of hours funded : breakdown of new productions 
per format of productions 
Type of 
programmes 
Super 16 mm 
35 mm 
Video 625 
Video 1250 
TOTAL Call 1/93 
in hours 
197.2 
77.8 
698 
695.2 
1668.2 0/ 
/o 
11.8 
4.7 
41.8 
41.7 
100 Call 1/94 
in hours 
259 
62.5 
1755 
415 
2491.5 % 
10 
3 
70 
17 
100 Call 2/94 
in hours 
396 
134.6 
2034 
847 
3411.6 % 
11.6 
3.9 
59.6 
24.8 
100 Total hours : 
1/93+1/94+2/94 
852.2 
274.9 
4487 
1957.2 
7571.3 % 
11.143 
3.8697 
57.154 
27.834 
. 100 
Table 3 
Total number of hours funded : 
breakdown New programs / Conversions 
Type of 
programmes 
New 
productions 
Conversions 
TOTAL Call 1/93 
in hours 
1669 
1269 
2938 % 
57 
43 
100 Call 1/94 
in hours 
2490 
2065 
4555 % 
55 
45 
100 Call 2/94 
in hours 
3420 
2240 
5660 % 
60.424 
39.576 
100 Total hours : 
1/93+1/94+2/94 
7579 
5574 
13153 % 
57.475 
42.525 
lOfr 
52 
Table 4 
Total funding : breakdown New programs / Conversions 
Type of 
programmes 
New 
productions 
Conversions 
TOTAL Call 1/93 
in MECU 
10.195 
1.408 
11.603 /o 
57 
43 
100 Call 1/94 
in MECU 
19.742 
2.783 
22.525 % 
55 
45 
100 Call 2/94 
in MECU 
32.239 
1.318 
33.557 % 
96.1 
3.9276 
5 
100 Total Funding : 
1/93+1/94+2/94 
62.176 
5.509 
67.685 % 
69.357 
30.643 
100 
Table 5 
Total number of hours of new productions funded : 
breakdown stock / flow 
Type of 
programmes 
Stock 
Flow 
TOTAL Call 1/93 
in hours 
590 
1079 
1669 % 
35 
65 
100 Call 1/94 
in hours 
991 
1499 
2490 % 
40 
60 
100 Call 2/94 
in hours 
1219 
2189 
3408 % 
47 
53 
100 Total hours : 
1/93+1/94+2/94 
2800 
4767 
7567 % 
37.003 
62.997 
100 
53 
Table 6 
Breakdown of hours and funding for new productions per category of beneficiaries 
Type of 
programmes 
Indep. Producers 
Broadcasters 
Total number In Hours 
Call 1/93 
622 
1047 
1669 Call 1/94 
547 
1947 
2494 Call 2/94 
1512 
1868 
3380 In MECU 
Call 1/93 ICall 1/941 Call 2/94 
43 73 Î42 
5.6 12.4 15.3 
ÏÔÂ Ï977 29^5 
-0-0-0-
5T 
ISSN 1024-4492 
KOM(95) 263 lopullinen 
ASIAKIRJAT 
FI is 
Luettelonumero : CB-CO-95-286-FI-C 
ISBN 92-77-90387-2 
Euroopan yhteisöjen virallisten julkaisujen toimisto 
L-2985 Luxembourg