PROPOSAL FOR A COUNCIL DECISION CONCERNING THE IMPLEMENTATION OF AN ACTION PROGRAMME TO PROMOTE THE DEVELOPMENT OF THE EUROPEAN AUDIOVISUAL INDUSTRY ( 1991-1995 )
Date: 1990-05-04
Institutions: European Commission
Subjects: European audiovisual area, action programme, audiovisual industry, free movement of programmes, industrial development, new technology

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0MC90) 132 final 

Brussels, 4 May 1990 

Commission Communication to the Council 
accompanied by two proposals for Council Decisions 

relating to an 

ACTION PROGRAMME 
TO PROMOTE THE DEVELOPMENT OF 
THE EUROPEAN AUDIOVISUAL  INDUSTRY 
"MEDIA" 
1991-1995 

n O N T E NT  S 

l. Preamble 

2. Context 

2.1  The programme industry: a growth sector 
2.2  A major problem : the mismatch, between supply and demand 
2.3  Important observation : the accentuation of "non-Europeann supply 
2.4  A solution : the creation of Community cooperation structures 

3. An action programme for the promotion of the European 

3.1  What the Community has done so far : the MEDIA pilot phase 
3.2  Principles of Community action 

3.2.1  Contributing to the completion and operation of a 
substantial part of the common market in services 

3.2.2  Departitioning of the national markets and creation 

of cross-frontier cooperation networks 

3.2.3  Support for the restructuring of the audiovisual industry 

with priority for small firms 

3.2.4  Finding the right balance between "small" and "large" 

industries 

3.2.5  Launching a coherent set of complementary measures, whose 

specific value lies in the Community dimension 
3.2.6  Large-scale recourse to market finance for the 

programmes industry 

3.3. Lines of action 

3.3.1.  Mechanisms for encouraging distribution and commercial 

promotion 

3.3.1.1 Film distribution in cinemas 
3.3.1.2 Distribution in video-cassettes and on television 
3.3.1.3 Support for multilingualism in television 

programmes 

3.3.1.4 Development of the independent productions market 

3.3.2. 

Mechanisms to iirrprove production conditions 

3.3.2.1. 
3.3.2.2. 
3.3.2.3. 

3.3.2.4 

Developing preproduction 
Restructuring the cartoon film industry 
Promoting the use of new European 
technologies in programme production 
Creation of a  "second market" using archive 
material 

3.3.3. 

Mechanisms to stimulate financial investment in the 
audiovisual sector 

3.3.4. 

Development of professional ski lis 

3.3.4.1. 

3.3.4.2. 

Activities linked to the other lines of 
action 
Training of "new managers" to cope with the 
single market 

3.3.5. 

Other developments 

3.3.5.1. 
3.3.5.2 

New audiovisual services 
Audiovisual activities in countries and 
regions with lesser audiovisual capacity or 
limited language area 

3.3.6. 

Synergies with Audiovisual EUREKA 

3.3.6.1. 
3.3.6.2. 

3.3.6.3. 

3.3.6.4. 

Two complementary instruments 
The Community action programme extended to 
include new partners 
The Community as a partner in Audiovisual 
EUREKA projects 
Other forms of participation in Audiovisual 
EUREKA 

4. Promoting cooperation with professiQTV\>S of non-Community European 

countries. jnrTh-irHng Central and Eastern Europe 

5. Conclusion 

1. PREAMBLE 

- 1-

In its Communication to the Council and Parliament on audiovisual policy 
(CCM(90)78 final), the Commission defined a general framework for measures 
to promote the European audiovisual programme industry. 

Pursuant to the plan of work announced in the Communication, the Commission 
is presenting to the Council these proposals for Decisions relating to a 
five-year action programme starting in 1991 based on the results of the 
MEDIA  pilot  experiments  and  setting  out  the  arrangements  for  the 
Community's involvement in Audiovisual EUREKA. 

Without repeating in full the analysis of the European audiovisual market 
presented  in the Communication, it is worthwhile recalling a  number of 
facts which justify the proposed programme and explain the urgent need for 
its introduction. 

2. QCKEEHI 

2.1 

THE PROGRAMME INDUSTRY:  A GBCWTH SECTOR 

The audiovisual sector is now seen as a strategic sector for the services 
industry in the European Community.  Although relatively modest in economic 
terms, its growth is significant:  put at ECU 25 billion in 1990, it should 
grow to around ECU 35 billion at the end of the decade.  In addition to its 
potential for economic growth, the audiovisual sector is important because 
of its socio-cultural dimension:  as a vehicle for the wealth and diversity 
of European cultures, its development gives expression to the very essence 
of  the  Community.  It  helps  to  shape  public  opinion  and  to  establish 
references for both behaviour and consumption. 

The growth forecasts are based above all on the development of television 
services, whose volume in terms of broadcasting time will increase by more 
than 50% over the next five years.  In addition to television stations, new 
audiovisual services will come into being thanks to the proliferation of 
techniques  such  as  video,  cable,  telematics  and  other  computer 
technologies. 

The audiovisual sector is quite clearly one in which demand is set to grow 
substantially:  demand for "programmes" in the broader sense of the terra --
TV  programmes,  cinema  films  and  miscellaneous  audiovisual  services -
engendered  by  new broadcasting,  recording  and  interactive  communication 
opportunities and techniques. 

2.2 

A MAJOR FR0BLH4:  THE MISMATCH BETWEEN SUPFLÏ AND DEMAND 

However,  the  audiovisual  programmes  industry  is  already  marked  by  a 
conspicuous mismatch between supply and demand, with demand far in excess 
of the industry's ability to satisfy it.  There is also a danger that the 
gap between supply and demand may grow considerably wider. 

There are many reasons for this: 

-  The circuits for the distribution/broadcasting of audiovisual works on 

the European scale are inadequate. 

-2-

Nearly 90% of European products - all types together - never go beyond 
the  frontiers  of  their  country  of  origin.  Consequently,  better 
circulation of such products throughout the Community market would help 
substantially  to  meet  the  shortfall  in  the  supply  of  audiovisual 
products for television, video and cinema. 

-  Production  capacities  are  fragile  because  they  are  limited  by  the 
excessively narrow structures of the national industries.  The national 
limitations are reflected by the small size of firms, investments and 
markets.  The  inadequate profitability  level  of national  products  is 
aggravated  by  the  constant  rise  in production  costs.  This  rise  is 
especially  felt  in  the  field  of  fiction, i.e. films  for  cinema and 
television series.  And yet fiction is an essential area of audiovisual 
activity.  It is the public's favourite type of product and the type on 
which the media base their appeal on the European and world markets and 
will be central to the development of the industry in years to come. 

-  The European industry has hitherto been unable to develop a  "second 
market" for its products.  The creation of such a i^broadcasting market 
should open the way for the further exploitation of large stocks of 
programmes which, at the present time, cannot be used profitably owing 
to problems concerning royalties, archive management or simply absence 
of catalogues. 

-  Lastly, from the point of view of investment, the audiovisual sector is 
regarded by the financial world as a high-risk sector, precisely because 
of the limitations of the production and distribution markets.  There 
are too few investors willing to operate on the basis of cross-frontier 
distribution of risks. 

2.3 

IMPORTANT OBSERVATION:  THE AOCHaTOAIION OF "NON-EUROPEAN" SUPPLY 

The European audiovisual sector is in a particularly difficult situation on 
on world markets.  This situation is likely to get worse as the gap between 
supply and demand in Europe widens. 

The effects of the world context on the audiovisual industry in Europe are 
already  numerous and  there is a danger  that  this  industry  will  become 
trapped in a vicious circle of underdevelopment.  Same examples: 

-  Companies  of  American  origin  control,  on  average,  60% of  film 
distribution in Europe (over 90% in some countries such as the United 
Kingdom); 

-  40% of European vidéocassette distribution networks are in the hands of 

groups of non-European origin; 

-  In  1988  Europe  bought  700 million  dollars'  worth  of  television 

programmes from the United States, mainly in the fiction category; 

-  Out  of  11 000 hours  of  animated  cartoon  programmes  broadcast  by 
television stations in the European Community in 1989, only 350 were of 
domestic  origin.  The  bulk  of  these  programmes  were  supplied  by 
Japan (60%). 

The European industry by contrast, because its ranks are divided, hardly 
manages to gain a foothold on the world market.  In the Onlted States and 
Japan it accounts for barely 2% of audiovisual and cinema programmes. 

2.4 

A SOUJTION:  THE CREATION OF OQNMQNIT? COOPERATION SIKJCIUKES 

The  fact  that  the  European audiovisual  sector  has  grown up  in  national 
frameworks means that its weaknesses are essentially structural in nature: 
they  lie  in  the  fragmentation  of  the market  and  the  dispersion  of  the 
industries.  Only cooperation between economic and cultural forces can lead 
to the creation of a European audiovisual area, which is the sine qua non 
for a strong industrial structure. 

creatlon-finaiKdJig-proteotion-oUstrlbutlon  chain, 

Cooperation will have to develop in all sectors along the whole length of 
the 
the 
establishment  of company networks and common infrastructures, by means of 
which the potential of the single market in the audiovisual sector can be 
turned to advantage: 

through 

-  The  audiovisual  sector  is  made  up  of  a  large  number  of  small  and 
medium-sized  firms.  These small  independent production companies must 
be  encouraged  to  set  up  co-production,  co-financing  and  commercial 
promotion structures suited to the requirements of both the European and 
the international markets. 

-  At the same time, distributor networks will have to be set up to remedy 
the lack of  "multinational" structures for the circulation of films in 
the Community and elsewhere in the world.  In particular, these networks 
must  be  given  incentive  mechanisms  by  means  of  which  the  language 
barrier,  which  is  the  major  obstacle  to  European  and  worldwide 
distribution, can be overcome.  These mechanisms will  be vital  for the 
productions of countries with less widely spoken languages. 

-  The  creation  of  a  second  market  by  increasing  the  cross-frontier 
profitability of programmes is a necessary complement  to the promotion 
of  independent  production  and  distribution.  The  difficult  problems 
connected,  in  particular,  with  the  exploitation  of  archives  can  be 
solved only through European-scale cooperation networks. 

-  Lastly, the European audiovisual sector will have to take advantage of 
new  techniques  for  production  and  broadoasting/d i stribution.  In  a 
rapidly  changing  context,  every  opportunity  offered  by  technological 
development must be seized  in order to encourage  the expansion  of  the 
European  audiovisual  market.  Furthermore,  the  cost  of  technological 
innovation  and  of  its  uses  in  programmes  warrants  the  pooling  of 
resources in the context of cross-frontier exploitation structures. 

-  In general terms, in addition to the establishment of company networks, 
capital  will  have  to  be  raised  by  means  of  new  systems  for  the 
involvement  of  investors and  the distribution  of  risks  both  over  the 
sector itself and at Comraunity level. 

An overall and coherent action programme is needed to meet the challenges 
posed by the future of the European programme industry. 

-4-

Strengthening the audiovisual capacity of Europe will involve structural 
changes on the scale of the Single Market.  This is a task of Community 
magnitude  requiring  coordinated  efforts  on  the  part  of  the  public 
authorities  in  the  Member  States and  at  Community  level.  A  Community 
programme within which each party would play its own role is an imperative 
requirement  for  the  development  of  the  necessary  instruments  for 
cross-frontier cooperation and in order to set up the incentive nechanisms 
needed to give structure to the European audiovisual area. 

3. AN  ACTION  rirraAMMR  T HE  «nre w i r m rK  OR  T H*  HTTOTIPRAW  AnnwTsnAT. 

IMUUfcTlKf 

The  proposed  action  programme  is  based  on  the  desire  to  improve  the 
economic context of the audiovisual industries in readiness for the advent 
of the Single Market.  To achieve this objective, incentive measures of a 
practical nature will be required in order to generate Community synergies 
in  each  sector.  These  measures  will  have  to  be  set  into  a  coherent 
programme which takes account of the complex nature  of  the" audiovisual 
sector and its specific mechanisms and which is designed to exploit the 
wealth and diversity of European cultures. 

Before presenting a definitive programme, the Commission was determined to 
make a pragmatic evaluation of the iiistruments needed for a development 
strategy.  After  consulting  a  wide  range  of  professional  circles,  the 
Commission  therefore  launched  pilot  experiments  intended  to  gauge  the 
appropriateness and effectiveness of a number of economic incentives for 
the audiovisual sector.  On the basis of the analysis of these experiments, 
a  set  of  realistic proposals can now drawn up  finely  tailored  to  the 
requirements of the industry and the market 

3.1 

WHAT THE COMMUNITY HAS DONE SO PAR:  THE MEDIA PHOT PHASE 

The pilot projects have been grouped  together under  the heading  "MEDIA" 
(Measures to Encourage the Development of ..the Audiovisual Industry). 

The MEDIA initiatives were designed to explore possible ways of providing 
economic  support  for  the  European  cinema  and  television  industry 
(cf  "Action  programme  for  the  European  audiovisual  media  products 
industry" 0GM(86)255 final of 26 April 1986) 

In Parliament, MEDIA is one of the "absolute priorities" of the Committee 
on Youth, Culture, the Media and Sport (PE 107.501/FIN).  On the basis of a 
report  submitted  by  Mr G  Papapietro,  in  1988  the  Committee  adopted  a 
resolution in favour of its development (doc  A2-135/88 of 1.7.88). 

This development is now a matter for a Council decision.  During the 1990 
budgetary procedure, the Commission undertook to present the Council with a 
proposal for a decision for the continuation of the MEDIA measures from 
1991 onwards.  To honour this pledge, the Commission is preparing to bring 
the experimental phase of MEDIA to a close;  it intends to move on to the 
principal phase in the context of a Community action programme designed to 
operate synergetically with Audiovisual EUREKA, thereby answering the call 
made to this effect by the Strasbourg European Council. 

-5-

The action programme is the culmination of a coherent series of initiatives 
consisting of three phases: 

-  Consultation of Industry phase (1987) 

This, the first consultation exercise on such a scale carried  out with 
the audiovisual industry in Europe, lasted a year and involved more than 
2 000 representatives  of  the professions  involved.  It was  accompanied 
by in-depth market studies in the production and distribution sectors. 

-  Pilot experiment phase (1980-90) 

On the basis of the consultations and studies, some ten pilot  projects 
were set up during  1988, which now involve more than 10 000 people and 
firms in the Community. 

-  Main pha.qe Oreglmlng ta 1991) 

On  the basis of  the pilot  experiments, the Community  action  programme 
will have to ensure that the achievements and guidelines emerging  from 
the trial phase bear fruit on a significant scale, and are supplemented 
where necessary by means of collaboration arrangements with Audiovisual 
EUREKA. 

In proposing  the action programme,  the Commission  refers  to  the  opinions 
expressed  by  European  professional  circles  meeting  at  the  Audiovisual 
Conference  held  in  Paris  last  October.  The  audiovisual  professionals 
recognized the great illustrative value of the projects of the pilot phase, 
which, they consider, must be developed in liaison with Audiovisual EUREKA. 
It  is  proposed  that  this  dialogue  with  the  professionals  should  be 
continued  and  intensified  by  setting  up  new  mechanisms  for  consultation 
providing  an  appropriate  framework  for  their  involvement  in  the 
implementation of the new programme. 

Further  to  the analysis  carried  out at  the audiovisual  conference,  these 
projects were evaluated by an independent group of experts.  The Commission 
has  carefully  examined  the  report  produced  by  the  experts  and  taken  due 
account of it in its proposal for a programme. 

It is proposed  that,  in implementing  the action programme,  the  Commission 
should  be assisted by an advisory committee  consisting  of  representatives 
of the Member States.  This committee, as well as the new mechanism for the 
consultation of professional circles set up by the Commission, will have an 
important role to play, especially in ensuring optimum transparency in the 
management  of  the  programme  and  appropriate  publicity  for  the  various 
projects  (thus partly answering  the concerns expressed  in  this  connection 
in the review report, particularly points 1.3 and 2 ). 

It is also proposed that, as suggested in the review report  (point 2.1.5), 
the  implementation  of  the  programme  should  be  the  subject  of  a  new 
evaluation two years after it starts.  It is to be noted that the analysis 
of  the  sector  to  which  the  report  refers  is  an  ongoing  exercise  being 
carried out both by the Commission and in other contexts  (e.g. Audiovisual 
EUREKA, with the establishment of the European Audiovisual Observatory). 

3.2 

PRINCIPLES OF OÛMMnNITÏ ACTION 

The  programme  proposed  by  the  Commission  sets  out  to  improve  the 
environment  of  audiovisual  businesses  without  directly  intervening  in 
production.  The  measures  will  be  located  upstream  and  downstream  of 
audiovisual production along the whole length of the industrial chain: 

2) 

-6-

they  will  concern  training,  pre-production,  the  inultilingualism  of 
programmes,  the  use  of  new  technologies,  distribution  moohanisms  and 
commercial  promotion,  the  creation  of  a  "second  market"  based  on  the 
exploitation  of  archives, and  the improvement  of  the financing  framework 
for the audiovisual sector. 

The effect of all these measures will be to establish the conditions for a 
Community programme.  This will: 

-  contribute to the completion and operation of a substantial  part of the 

common market in services; 

-  aim  to  bring  about  the  departitioning  of  the  national  industries  by 

creating cross-frontier cooperation networks; 

-  help find a balance between countries of different sizes by seeking to 

safeguard their identities; 

-  form a coherent set of activities, whose effectiveness will derive from 

Community dimension; 

-  be  based  to  a  large  extent  on  the  financing  of  measures  by  the 

programmes industry. 

3.2.1. ffîntliTyitlTTg to tfofi flfftflpletion and operation of ft ffltfftTfrffltlfrl PffiTt 

The  action  programme  will  seek  to  respond  to  the  Community's  priority 
objective  by  endeavouring  to  produce  the  "dimension  effect"  of  the  new 
economic area in the programmes industries : 

-  by  strengthening  the  national  industries  through  the  distribution  of 
their  products  on  a  Qammunity  scale  to  a  potential  audience  of 
320 million people; 

-  by  establishing  arrangements  for  cooperation  between  these  industries 
based  on  increased  production  and  distribution  capacities  on  the 
international market. 

The pilot experiments  carried  out under  the MEDIA banner have shown  that 
the economic approach brings out the best from the capacities for original 
programme production in the programme industries.  They tend to show that, 
if appropriate  stimulants are provided, vast markets  can be  opened up  in 
sectors long  regarded  as uneconomic because they were based  on what  were 
termed  "cultural" industries.  It is now becoming  clear  that  the  products 
of  these  industries  can  reveal  considerable  commercial  potential  in  a 
"departitioned" economic area. 

3.2.2.  Départi tinning  of  th*  yvrtinivLi  marfrgtfi ^ 

f*reatian  of  cross-

This will be based  on a  simple mechanism,  the effectiveness  of which  has 
been  shown  by  pilot  experiments:  the  linking  up  of  the  economic  and 
cultural operators in the programmes industry to form a network. 

The cross-frontier cooperation networks provide effective solutions to the 
major structural problem of the European audiovisual sector, which lies in 
the fragmentation and dispersion of  the industries.  The effectiveness  of 
these networks lies in their potential  for  "synergy", the effect of which 
is not merely to pool but actually increase the potential  of the partners. 

-7-

The  action  programme  will  continue  to  develop  a  "networks  policy"  as 
regards both companies and capital: 

-  by  establishing  and extending  networks  of  companies  in the  form  of 

Community cooperation and exchange federations; 

-  by raising capital by means of new financial  engineering techniques in 

the audiovisual sector. 

As  in  the  past,  the  coordination  centres  of  these  networks  will  be 
decentralized in the Member  States.  However, in order to respond  to the 
criticism set out in point 12 (penultimate paragraph) of the review report, 
a better geographical coverage of the Ctammunity will be ensured. 

priority for f^ll. fin*? 

In setting up enterprise networks, the programme will focus above all on 
small and medium-sized firms, which form the living fabric of the bulk of 
the European audiovisual industry and the importance of which will tend to 
increase in future.  Each of the networks will be organized in relation to 
a  specific  project  managed by professional  associations  set up for the 
purpose and operating in different countries.  Same 10 000 people and firms 
are already  involved in the projects being conducted in the experimental 
phase of the MEDIA programme. 

Organizing the audiovisual sector in federations of small firms will, as it 
were,  make it possible to restructure the market  from  the ground  up by 
giving  birth  to a  new type  of  "multinational  group".  These  groups may 
remedy the absence or inadequacy of large industrial companies in key areas 
of the audiovisual sector, for example in film distribution or the animated 
cartoon sector. 

3 . 2 . 4. 

f i l i ng  t**»  rtfflt  bfilttyra  W^^mj  "famuli"  «rid  "l*rgg«  ; ) ^ f r h r iœ 

By guaranteeing solidarity between countries and markets of different sizes 
the existing cooperation networks, through their density and cohesion, are 
an important  factor for the harmonious expansion of the European market. 
The  scope  of  the networks  makes  it  possible  to  overcome  the division 
between  "small" and  "large" and to carry  out  "balancing  operations" in 
favour of the less widespread cultures and languages in Europe. 

The desire to ensure such a balance will be evident in all the projects 
contained  in the action  programme.  It will  take  the form  of  incentive 
mechanisms  taking  account  of  the particular  difficulties  which  certain 
national industries encounter in penetrating the European market. 

3.2.5.  T«iry*ri^g «. ryihgrent set of complementary measures, whose specific 

valTje lies In Ifte. Community dimension 

The networks set up will be as extensive as possible in order to produce 
effects of scale and exploit the potential for synergy by covering all the 
countries  of  the  Coraraunity.  It  is  this  Community  scope  which  will 
guarantee their impact, giving them a specific value impossible to achieve 
on narrower markets. 

Since the problems of the audiovisual industry can only be solved  through 
cooperation at Community  level, the action programme  will not  therefore 
take the place of national initiatives but will play a subsidiary role in 
relation to them. 

-&-

Furthermore, the networks will be complementary or "interactive" in nature. 
They are already  combined  within  a  cohérent  experimental  framework  which 
encompasses all the functions of the audiovisual industry.  It is in this 
coherence  of  the measures  that  the specific value  of  the Ctammunlty-scale 
programme will lie.  It would serve little purpose to increase the number 
of  isolated,  one-off  projects  with  no  functional  links.  Since  all  the 
different  areas  of  the audiovisual  sector are interdependent,  an  overall 
approach must be adopted involving a set of complementary initiatives. 

3.2.6.  IifM^-srale recourse tn  mm***,  firmnn  fnr -hhft pmgPftmmflR industry 

The programme does not propose a system of subsidies:  its basic principle 
consists  in  injecting  seed  capital  into  the  industry  so  as  to  attract 
additional  finance  from  private investors, professional  organizations  and 
various promotion bodies. 

The power of attraction of the money advanced for the pilot experiments in 
progress  is  considerable.  At  the  end  of  1989,  the  experiments  launched 
under  the  MEDIA  programme  had  a  total  value  of  around  ECU 40 million 
compared  with an  initial  outlay  of  ECU 13.5 million.  This  figure  can  be 
expected to double in the course of 1990. 

The  action  programme  sets  out  above  all  to  stimulate  the  market:  no 
project will receive a financial contribution of more than 50% of its cost, 
the aim being to limit funding to 30%. 

Furthermore, the amounts assigned to the pilot projects have hitherto been 
allocated  in  the  form  of  loans  repayable  to  the  bodies  responsible  for 
managing the project and are intended to be reinvested.  These mechanisms, 
which will continue to be applied during the main phase, should  enable the 
projects to become self-sufficient after a few years thanks to the creation 
of  their  own capacity  to generate  finance  (see review  report,  points 1.2 
and 2.1.2).  This mechanism  is already  in  operation as  regards  the  pilot 
experiments;  initial  returns on investment  confirm  the economic  validity 
of  the measures  undertaken  and  justify hopes  for  their  viability  in  the 
long run. 

The large sums raised in a very short time are a pointer  to  the enormous 
potential  which  can  be  harnessed  for  the development  of  the  audiovisual 
sector in the European Community.  This potential will grow further through 
the extension of initiatives beyond the frontiers of the Twelve, as already 
shown by the participation of Switzerland and Austria in certain projects. 
The  involvement  of  new  non-Community  partners -  particularly  in  the 
Audiovisual  EUKQCA  context -  will  serve  to  increase  the  potential  for 
synergy  and  make  the  European  industries  more  competitive  on  the  world 
market (see review report, point  2.1.3). 

However, the resources available to the MEDIA programme in its pilot phase 
were very limited compared with the requirements of the single audiovisual 
market.  In its main phase, the action programme will therefore have to be 
endowed with far more substantial  means if it  is to have any  significant 
impact  on  that  market.  The  new  financial  resources  will  have  to  be 
modulated  over  time:  their  curve  will  have  to  rise  in  the  early  years 
before declining as the projects become self-financing  (see review report, 
points 2.1.1 and  2.1.2). 

3.3 

LINES OF ACTION 

- 9 -

The lines of action proposed for implementing the programme take account of 
the  lessons  learnt  from  pilot  projects  and  consultations  by  MEDIA,  the 
proposals made by the Audiovisual Conference and the recommendations of the 
Group of Experts set up to assess the results of the pilot stage. 

The action is to be  taken both before and after actual production at  all 
stages of the production chain, but will not involve the direct  financing 
of specific works.  The object is to create a climate which will help the 
development of firms by allowing incentives to be offered and cooperation 
networks  to  be  set  up  in  order  to  compensate  for  the  fragmentation  of 
markets and the dispersion of the industry.  The programme is not designed 
to provide a framework for direct production subsidies.  This approach was 
substantiated by the review  report (point 1.3).  However, in line with the 
report's recommendations, implementation of the main phase of the programme 
will take account of the need to consider the production chain as a whole 
whose links are becoming increasingly interdependent. 

sectors 

Four 
considered:  distribution/promotion, 
"periproduction"  (or production environment),  the financing  framework  and 
training. 

have 

been 

3.3.1. 

Mgnha.-ni.care for encouraging ^IfytTlbntjnn anfl commercial  promotion 

Activities on this front are priorities with an eye to maximum exploitation 
of  the  potential  of  the  single  market.  The  cn\rculation  of  European 
productions is hampered both by  the language barrier and the partitioning 
of national markets and by the inadequate efforts deployed in distribution 
and cranraercial promotion. 

3.3.1.1.  Film distribution in cinemas 

80% of European films go no farther than the frontiers of their country of 
origin,  while  an  average  of 60% of  film distribution  circuits  in  Europe 
(over  90%  in  some  countries  like  the  United  Kingdom) are  controlled  by 
companies  of  American  origin.  Only  cooperation  between  European 
distributors will enable them to send films across frontiers and so attempt 
to create a single cinema-film market. 

-  An initial pilot experiment has been conducted:  it was mounted by EFDO 
(European  Film  Distribution  office),  in  support  of  transnational 
distribution  of  European  films  in  cinemas.  It  demonstrated  that  the 
advent  of the single market is boosting the profitability of films and 
using  creative  potential  to  advantage.  Run  by  producers  and 
distributors,  EFDO  is  helping  to  set  up  co-distribution  networks  by 
fostering cooperation between cxanpanies which were previously operating 
in  isolation  on  their  national  territory.  EFDO  grants  distributors 
advances  against  receipts  of  between 50%  and 100%  of  the  costs  of 
dubbing/subtitling,  copymaking  and  promoting  European  films,  provided 
these are co-distributed in at least three countries.  Priority is given 
to  films  presented  by  the  largest  number  of  distributors  of  various 
countries by means of a points system which favours films originating in 
the small countries and their film distributors. 

- 10 -

Since  EFDO  started  up  in  November 1988,  25 films  have  featured  in 
107 launchings  in  13 countries 
countries  and 
Switzerland).  The number of tickets sold to see these films in cinemas 
will  soon  reach  5 million.  Box-office  receipts  are  enabling 
distributors to start paying back EFDO's advances (more than 10% by way 
of contribution to recapitalization).  These sums are ploughed back into 
the launching of other films. 

(the  Community 

-  The Twelve produce  over  500 full-length films a  year, hut  over 80% of 
these  films  never  leave  their  country  of  origin.  To  have  any 
significant impact on the Community market, incentives to cross-frontier 
distribution  should  extend  to  at  least 20% of  this  output,  i.e. to  a 
hundred  or  so  films.  Stimulating  tije market,  by  strengthening  the 
network  of  European distributors, will also have a  positive effect  on 
the circulation of films not directly supported by the system. 

-  In the pilot  stage EFDO confined  itself  to promoting  works which cost 
less  than  ECU 2 250 000  to  produce  (i.e. 80% of  European  output).  To 
promote better  circulation  of  films costing more  than  that  (which are 
increasing in number because of the proliferation of co-productions and 
rising costs) the support system will have to be extended to cover the 
distribution  of  films costing  between  ECU 2 250 000  and  ECU 4 500 000 
(see review report, points 2.2.1 and 3). 

-  A  special  effort  must  be  made  for  European  film  promotion  campaigns 
outside  the  Community  in  order  to  boost  their  distribution and  their 
international  competitiveness  (offices  to  promote  European  film  and 
television  programmes,  particularly  in  the  United  States  and  Japan, 
group presence at festivals and fairs) (see review report, point 3 ). 

Lastly,  the EFDO pilot project has confirmed that, to be  fully effective, 
the  distribution  of  European  films  calls  for  an  enhancement  of  the 
film-projection  sectors,  i.e. the  cinema  network/csircuit.  Measures  to 
promote this sector will be developed so as to promote the programming  of 
European films. 

3.3.1.2.  Distribution in vidéocassettes and on television 

A growing proportion of film receipts is now accruing from their screening 
as  vidéocassettes,  although  this  market  represents  a  volume  of  only 
ECU 3 billion  compared  with  ECU 7 billion  in  the US.  European  films  are 
very  much  under-represented  on  these  circuits.  That  is  why  a  series  of 
measures  must  be  envisaged  in  addition  to  the  support  for  cinema 
distribution: 

-  The  EVE  (European  Video  Area) pilot  project  has  devised  a  scheme  of 
advances  against  receipts  to  promote  the  cross-frontier  issue  and 
circulation  of  European works, based  on the model  tested by  EFDO  (see 
review  report,  points 2.2.9  and  11).  A  maximum  advance  of 40%  of 
issuing,  dubbing/subtitling  and  promotion  costs will  be  earmarked  for 
European  films not  issued  on video  and distributed  by  at  least  three 
issuers in different countries. 

The scheme will be supplemented and reinforced by organizing 

- 11 -

cooperation between existing European public médiathèques and libraries 
to encourage the issue of video films and the constitution  of  subject 
"collections", particular in the field of documentaries and  children's 
films. 

-  The circulation of European films by the television channels is the next 
stage in ensuring optimum exploitation and a growing source of revenue, 
in  view  of  the  increasing  number  of  competing  distributors.  Some 
measures  seeking  to  boost  the  proportion  of  European  films  in 
circulation  have  already  been  tested  and  will  be  strengthened  (see 
below 3.3.1.3.),  but  additional  measures  are  needed,  particularly  to 
promote independent production. 

3.3.1.3.  Support for mu1t.111ngua11sm in television programmes 

Multilingual ism  is  one  of  the  basic  requisites  for  the  circulation  of 
audiovisual production.  The need to develop it will be even greater with 
the growth of direct satellite broadcasting, which will  make  it  possible 
for  each  programme  to  be  available  in  several  language  versions  over 
extensive geographical areas, and even in all the countries of Europe (see 
review report, points 2.2.8 and 10). 

-  The BABEL pilot project  (Broadcasting Across the Barriers  of  European 
Language) has  confirmed  the  substantial  needs  in  the  multilingualism 
sector, a key  factor  in the circulation of European productions.  The 
assistance with dubbing or subtitling provided by BABEL is granted by an 
International  Committee  of  experts  on multilingualism  and  production, 
priority being given to works using the less widely spoken languages in 
Europe, to works of fiction (especially those intended for young people, 
including cartons), to pilot TV series and documentaries. 

With limited funds, BABEL has so far managed to support the dubbing  or 
subtitling of 52 television programmes and series from 13 countries for 
102 transmissions  in  several  languages:  32 of  these  programmes 
originate in "small countries". 

-  Given more substantial  funds  (with, as  for other  incentive  schemes, a 
scheme  of  advances  against  receipts  for  "sound"  postproduction  of 
programmes), BABEL will have to stimulate circulation more  effectively 
and  thus  boost  the  profitability  of  European  products  designed  for 
television, especially those made by independent producers. 

-  BABEL  must  also  support  the  development  of  multilingual  broadcasts, 
including  the  provision  of  simultaneous  interpreting  in  television 
discussion  programmes,  particularly  in  the  field  of  information, 
training and  culture to affirm European identity and benefit  from  the 
diversity  of  its  constituents  ("Euronews"  project;  broadcasts  of  the 
Seven;  programmes on Olympus,  ... ). 

3.3.1.4.  Development of the independent productions market 

All  in all, almost 90% of  European  television  productions  remain  within 
their country of origin.  Better circulation of existing productions 

- 12 -

throughout the Community market would, however, help to make up the deficit 
in audiovisual supply.  The marketing of these productions is an essential 
stage in their distribution. 

-  EURO-AIM (European Association for an Independent Producers market), set 
up in the MEDIA pilot project, organizes grouped producers' attendance 
at international, media trade fairs, offers guidance on the presentation 
of  films  and  contacts  with  buyers,  and  facilitates  access  for its 
members  to productions  available  through its data  base.  Presence in 
EURO-AIM's  stands  on  special  financial  terms  is  intended  first and 
foremost  for  producers  who have  not previously  had access  to  these 

The services offered to independent producers by EURO-AIM in the pilot 
stage have confirmed that this is the right approach.  For an investment 
of  ECU 1.5 million  during  MEDIA'S  trial  period  more  than  a  thousand, 
production companies were promoted at seven major international fairs, 
achieving a turnover of ECU 20 million. 

This volume must be increased 

-  by highlighting the profile, promotion and effectiveness of the European 
presence  on the major  markets and by featuring  particular  sectors of 
production (archives, documentaries, youth productions, etc. ) ; 

-  by developing  these promotional activities on non-Community  markets to 
stimulate  sales of European productions, notably in North  America and 
Japan, in conjunction with the activities to promote the European cinema 
(see above); 

-  by developing  the services  (legal and marketing  assistance;  contacts 
with  buyers;  promotion  guidance;  coordination  of  co-productions) 
available to small production firms, outside the fairs; 

-  by expanding the EURO-AIM data base to cover all the parameters of the 
independent  production  market  (producers and buyers,  rates,  available 
productions,  planned  co-productions, etc.) and by facilitating  use of 
the data base by setting up a decentralized network of access points. 

These services should  continue to be offered at reduced  rates during the 
first two years of the programme.  The possibility of charging for them at 
cost  price  should  then  be  considered  (see review  report,  points 2.2.7 
and 9 ). 

3.3.2. 

M^nhani.cms to improve product.inn ppTYiitinnfi 

The discussions  conducted before the launching of the MEDIA  pilot  phase, 
like  the Audiovisual  Conference,  emphasized  the quantitative  deficit  of 
European production.  To help make up the deficit, the effort of the action 
programme  will  focus on improving  production  conditions,  both  before and 
after  the  programmes  are  actually  made.  This  will  facilitate  the 
development of "preproduction",* rationalization of infrastructures, use 

Which is, in a manner of speaking, the equivalent in audiovisual terms 
of "research and development". 

- 13 -

of advance technologies, use of programme stocks for the creation of  a 
second market and, more generally, the conditions for financing production 
and distribution. 

3.3.2.1.  Developing pre-production (fUjm and dooumentaries) 

Fiction is the type of work for which public demand is greatest and is the 
product most sought after by distributors, in Europe and throughout the 
world.  It  constitutes  a  major  commercial  prize.  A  large  variety  of 
pre-production  material  containing  story  lines  well  suited  to  the 
requirements of a transnational audience must be available to attract the 
essential  investments  by  financial institutions  and  so  expand  European 
production capacity and competitiveness. 

-  The pilot project of the European Script Fund, which examined a thousand 
files and backed a hundred or so pre-production plans, offers a sound 
basis for development.  SCRIPT set up a Steering Committee consisting of 
experienced professionals from each of the twelve tanmunity countries in 
order to organize and supervise the selection of fiction scripts to be 
developed  up  to  the  production  stage.  The  scripts  approved  by  an 
executive  panel  assisted  by  a  network  of  readers  and  consultants 
throughout Europe received loans averaging 50% of  the screenplay and 
pre-production costs invested by the producers, directors and writers. 

-  In  order  to  reach  a  significant  threshold  with  a  real  impact  on 
production in Europe, SCRIPT'S funding capacity must be at least doubled 
and backed by specialized professional services so that projects can be 
tailored  more  closely  to  market  requirements  (see  review  report, 
points 2.2.2 and 4). 

To give these projects the best chances of reaching production, SCRIPT 
should offer two additional forms of assistance: 
(i) 
assistance with screenplay writing ("script monitoring"); 
(ii)  assistance  with  production  financing,  to  facilitate  contacts 

between potential associates. 

-  The  assistance  provided  for  development  and  the  pre-production  of 
projects must be extended  to production companies offering  a  set of 
projects. 

-  While priority will be given to works of fiction, these measures could 
also be applied to the development of creative documentaries involving 
cooperation between a number of countries.  Most of the documentaries 
produced in Europe are of a specifically national cast, which limits 
their potential for screening. 

3.3.2.2.  Restructuring the cartoon film industry 

Despite the universally recognized talent of its cartoonists and despite a 
priceless heritage in the art of drawing, Europe is handicapped  by its 
cartoon  studios'  lack  of  production  capacity,  in  an  international 1 y 
expanding market.  11 000 hours of cartoon programmes were broadcast in the 
Community in 1989, whereas only 350 were produced by the domestic industry. 

(3) 

- 14 -

-  The networking of European studios, begun during the second pilot phase 
by CARTOON (European Animated Film Association), is the response to the 
problem of the dispersion of production structures, and facilitates the 
production of major, high-quality cartoon series at competitive prices. 
Each network, made up  of  3 to 5 studios based  in different countries, 
will receive for a maximum of three years an advance against  technical 
coordination and management costs. 

-  Eventually,  some  twenty  pools  will  group  over  80 studios  to  develop 
solid  production  infrastructures  and  increase  the  share  of  the 
international  market  held  by  Europeans.  This  partnership  of  studios 
should  be  strengthened  by  industrializing  their  working  methods, 
harmonizing the materials used and computerizing production techniques. 
It will help to ensure in Europe the volume of activity currently being 
subcontracted  to  the Asian  industries, which represents a  turnover  of 
over ECU 80 million a year. 

-  As  with  other  types  of  products,  the  pre-production  and  production 
stages of pilot films are essential in the making of cartoon films.  To 
obtain quality material they demand substantial start-up capital in the 
form of advances against receipts.  Up to now, some twenty projects have 
been  successfullY  completed;  the  aim  is  to  produce  fifty  "pilots"  a 
year (see review report, points 2.2.4 and 6 ). 

-  In  addition,  an  information  system  specific  to  European  cartoon-film 

making will be developed: 

by  organizing,  twice  a  year,  a  "CARTOON  Forum"  attended  by 
distributors  and  studios  to  match  supply  to  demand,  speed  up 
co-production  of  projects  and  shorten  the  time  taken  to  put 
together financial packages; 
by developing  the data bank  on cartoon-film  makes and artists, 
available studios and  facilities, projects in hand and  training 
programmes. 

3.3.2.3.  Promoting  the  use  of  European  new  technologies  in  programme 

production 

The  new  technologies  (infography,  digital  television,  high-definition, 
interactivity) represent a rapidly expanding market.  To gain a foothold on 
this market, dominated by  the United  States and Japan, Europe must  group 
its efforts to obtain synergies in research, production and information. 

-  To help meet this challenge, in the pilot phase, the  "MEDIA  Investment 
d ub  for Advance Technologies applied to the Production of Audiovisual 
Programmes"  has  brought  together  industrial  companies,  communications 
groups and financial institutions to promote the place of audiovisual  in 
leading-edge  technologies.  It  represents  a  "meeting  point"  for 
exchanging  information  and  providing  incentive.  Its  current  members 
Philips 
are:  Thomson 
International  (NL),  PESA  Electronica  (E),  Maxwell  Connnunications (UK), 
Consignations) (F), 
CDC Participations 
Nederlandse 
Antenne 2  (F), 
de 
Ctoroepbedrijf (NL), 
l'Audiovisuel/INA (F), and the Commission. 

et 
Italiana/RAI (I), 
Institut 

(Caisse  des 
Radio-Televisione 

Communication  (F), 

Techniques 

National 

SBP  (I), 

Depots 

the 

de 

- 15 -

A  Technical  Committee,  assisted  by  a  permanent  secretariat  whose 
operating  costs  are  partly  borne  by  the  Community  iudget,  selects 
innovatory  projects  concerning  audiovisual  creation  and  production 
(generally  presented  by  smaller  companies),  training  and  information 
technology.  Initial, financing  is provided  from a  fund made up  of  club 
members' fees and by a matching contribution from the Ccanraunity budget. 
In a second stage the most promising projects from  the marketing  angle 
are financed solely by their promoters. 

Up to now,  the (Hub has handled 60 projects, of which it has  supported 
two  European-standard  HDTV  productions,  two  synthesized 
image 
3D productions,  a  European  infography  and  synthesized  image  training 
programme,  an  interactive  c«nrpact-<lisc  production  (CD-I)  and  a 
production by the IMAX-CMNIMAX cinematographic process. 

-  As  its  activity  in  the  pilot  phase  is  still  below  the  critical 
threshold,  the  (Hub  must  expand  in  order  to  achieve  the  volume  of 
finance which will make it the effective catalyst  for a European  scheme 
to  boost  the  innovative  and  creative  capacity  of  European  companies 
engaged in the production of audiovisual programmes  (see review  report, 
points 2.2.5 and 7 ). 

-  In order to put  to work the assets represented by Europe's know-how  in 
research and development,  creation,  information and  training,  the  d ub 
will  issue  invitations  to  tender  to  promote  innovatory  projects  in 
infography, composite techniques (mixture of real and synthetic images), 
interactive systems and high-definition television. 

created 

In  liaison  with  EURKA  and  Audiovisual  EURKA  and  with  the  EEIG 
grouping 
"Vision 1250", 
industrialists and distributors involved in the development of HDTV,  the 
Club must support measures to promote the making of films and  programmes 
utilizing  European-standard  HDTV.  It  must  help  with  the  training  of 
professional image-makers in the use of the new equipment. 

Community 

support 

with 

and 

3.3.2.4.  Creation of a  "second market" using archive material 

Although  they  could  be  making  up  the deficit  in  the  supply  of  European 
programmes, considerable resources are locked away in television and cinema 
archives.  These  constitute  substantial  assets,  both  economicallY  and 
culturally. 

-  The  MAP-TV  (Memoiy-Aichives-Pi^grammes)  project,  supported  during 
MEDIA'S pilot phase, has created a network between  the archive  services 
of European TV  ccanpanies, cinema-film  libraries and  other  repositories 
of  audiovisual  material.  It  is  endeavouring  to  make  use  of  the 
archives,  both  for  documentary  and  news  productions  and  for  fiction. 
The Community must provide financial  support to operate and expand  this 
network. 

-  Turning  the assets  of this  "memory bank" to advantage  by  reissuing  and 
rebroadcasting works or by using them in the production of new series 

- 16 -

will help  to create a  genuine  "second market" designed  to reduce the 
European deficit in production and boost the sector's profitability. 

-  All this will necessitate agreements between producers and distributors 
in  order  to find  solutions  to the problems of royalties,  which  often 
hamper  the use of archives, and to compile the catalogues  required to 
promote them on the market. 

3 . 3 . 3. 

Mftr*umi.caire  -hn  «rtmn1*-hft  f l r w i f i i f tl 
fîeûtox 

iTtrertinPrvh  JTÏ  «Khg  « n H r n H s ml 

The restructuring  of the European audiovisual  industry,  the impetus  given 
to carefully prepared projects and the outlets offered by the single market 
must  all help  to attract  new investors  to the audiovisual  sector.  The 
purpose of the action programme will be to study and, by coordinating the 
efforts  of  the  operators  and  encouraging  them  to  join  together  on  a 
European scale, to develop new financial mechanisms adapted to the sector's 
specific problems. 

whenever  it  proves  essential  to  mobilize  and  coax  the  investors,  the 
programme will provide finance to initiate the setting-up of the structures 
which,  if  need  be,  can  subsequently  be  developed  in  liaison  with 
Audiovisual EUREKA.  The aid. arrangements will be studied according to the 
nature and specific needs of each mechanism, with reference being made to 
the initiatives already launched by the Community,  especially in favour of 
small firms and companies developing new technologies. 

In  the  MEDEA  pilot  phase,  two  structures  have  been  developed:  a 
risk-capital fund - MEDIA Venture - and a guarantee fund - MEDIA Guarantee. 
The plan is not to renew  this form of Community  assistance,  in line  with 
the suggestions of the review report  (points 2.2.6 and 8 ). 

The  Commission  nevertheless  considers  that,  because  of  the  absolute 
necessity  to  improve  the  financial  framework  of  production  and 
distribution,  appropriate  measures  must  be  taken  to  prompt  the 
establishment  at European  level of other mechanisms,  some of which  exist 
solely at national level.  To this end, the Community's  role should mainly 
consist  of  promoting  innovation  in the setting-up  of new  transnational 
investment  inechanisms  in  the  audiovisual  sector,  in  establishing  new 
networks  and in contributing  to the  "getting  together"  of  professional s 
operating in this field. One example of the type of measure to be applied 
would be the setting-up of a network (creation of an association and a data 
bank) of European  suppliers of risk  capital  operating  on the audiovisual 
front or prepared to do so. 

Moreover initiatives in this field may give rise to developments in liaison 
with Audiovisual  EUREKA. 

3.3.4. 

Development of profefyrioml fftlllfi 

The development of the European audiovisual sector depends on the ski 11 and 
proficiency  of  its  operators.  The  action  programme  will  include  many 
activities  in this  area,  which have  already  been  fully  tried  and tested 
during the MEDIA pilot phase.  These activities have one common 

- 17 -

feature:  they  are  all  concrete  measures  involving  professionals  on  the 
job, and are therefore of an essentially pragmatic nature designed to meet 
the practical needs of the market. 

They  split  into  two  types:  awareness-stimulating  and  knowhow-transfer 
measures  urnr^  to  each  of  the  programme's  lines  of  action,  and  the 
specifically economic training of the "new managers" who will be needed by 
the audiovisual industry operating on the scale of the single market. 

3.3.4.1.  Activities linked to the other lines of action 

This  bears  first  and  foremost  on  imiltilingualism,  screenplay  writing, 
cartoon designing and the new technologies. 

-  Multilingualism:  BABEL  will  provide  facilities  for  perfecting  the 
skill s  for  journalists and  other audiovisual professionals  working  in 
multilingual environments; 

-  Screenplay  writing:  SCRIPT  is  proposing  "script  doctoring"  sessions 
intended  to  increase  the  professional  ski lis  of  European  screenplay 
writers; 

-  Animation:  CARTOON  will  endeavour  to promote  the  transfer  of  knowhow 
between the cartoonists, studio managers and graphics coordinators who 
will be needed to form the networks of cartoon studios; 

-  New  technologies:  the  MEDIA  (Hub  is  developing  schemes  for  the 
initiation of professionals in the use, in producing audiovisual works, 
of new techniques in image synthesis, digital TV, high-definition TV and 
interactive TV. 

Since  these  activities  constitute  any  integral  part  of  the  actions  in 
question, it  is proposed  that part  of  the  overall budget  allocation  per 
action line be devoted to each of them. 

3.3.4.2.  Training of "new managers" to cope with Hie single market 

Special  emphasis  is  laid  on  an  original  idea,  namely  ecîonomic  and 
commercial training with an eye to the single market.  Hitherto absent from 
cinema and television schools in Europe, this type of pragmatic training is 
central to MEDIA'S activity.  It is designed to enable the professionals to 
adapt to the new economic dimension of the European audiovisual area and to 
acquire the management ski lis needed to take full advantage of it. 

From  that  angle,  the  action  programme  must  continue,  and  refine,  the 
economic and cx3mmercial training  courses  for young producers, created  by 
"European Audiovisual Entrepreneurs (EAVE) (see review report, points 2.2.3 
and 5).  Some  80 producers  have  so  far  attended  the  "Entrepreneurs" 
workshops to develop their production material.  Much of this material has 
already been given tangible shape by financing, which has resulted in the 
production of full-length cinema films, television films, documentaries and 
a series of video clips. 

In addition, other training, of varying length and level, must be organized 
as a practical response to the economic and cranmercial problems confronting 
the various  audiovisual  specialities in an  environment  stamped  with  the 
needs of the single market. 
As this training measure, although an integral part of the Programme, is 
not directly linked to the other lines of action, it is proposed  that it 
should receive a specific budget allocation. 

3.3.5. fflhgr dflyelopments 

- 18 -

As announced in the Commission communication to the Council and Parliament 
on audiovisual policy, the action programme will, in order  to maintain 
flexibility and an open approach, continue to explore new ground with a 
view  to adapting  to  the longer-term  trend  of  the European audiovisual 
sector. 

3.3.5.1.  Hew audiovisual services 

The programme can promote the birth, at European level, of new audiovisual 
programme  services  using  new  commuMoations  technologies  (interactive 
communication on videodisc, broadcasting by satellite or in the new cable 
networks). 
specialized  services,  e.g. subject  channels, 
particularly in areas such as training, tourism and news, can be tried out. 
The  programme  will  support  exchanges  of  experience  and  transnational 
cooperation between European suppliers of this type of service. 

New 

3.3.5.2.  Audiovisual  activities  in  countries  and  regions  with  lesser 

audiovisual capacity or limited language area 

Activities in regions with lesser audiovisual capacity, and in those with a 
limited  language  area  in  Europe,  will  be  designed  to  enhance  their 
audiovisual  potential  and  affirm  their  identity  and  their  assets. 
Moreover, audiovisual development in those regions could have a knock-on 
effect for their other economic activities.  Regional development of the 
audiovisual industry may have a positive economic impact on those regions 
and lead to the creation of new and skilled jobs.1 

Measures will be tailored to the specific needs and potential of each area. 
Transregional initiatives will  thus group regions  of varying  levels in 
order  to  combine  assets  and  promote  the  transfer  of  ski lis  and 
technologies. 

"Regions with lesser audiovisual capacity" must not be confused with 
"less-favoured  regions"  in  the  macrceconomic  sense.  Regions  or 
countries  with  lesser  audiovisual  capacity  are  those  where  the 
audiovisual sector, either because the market is limited in terms of 
population size or because it belongs to an area using one of the less 
widely spoken languages, and regardless of the level of general economic 
development, is particularly  likely, provided  certain conditions are 
met, to benefit  from the effects of transnational cooperation.  The 
programme will seek to satisfy these conditions. 

- 19 -
One  possibility  will  be  to  support  "horizontal"  measures  involving  the 
coproduction  of  multilingual  cross-frontier  magazines,  programme 
exchanges, vocational  training  and, especially,  the  training  of  managers 
familiar with the characteristics of the countries and regions concerned. 

The  favoured  instrument  will  be  to  form  networks  of  media  development 
corporations  in  regions with either  low  or high  audiovisual  capacity  in 
order to prompt mutually beneficial cooperation. 

3.3.6. 

Synffrglffi with Awllovlffirt) fflWRgA 

3.3.6.1.  TWo complementary instruments 

Both Community policy and Audiovisual EURKA are pursuing the same general 
objective,  namely  to  boost  Europe's  audiovisual  capacity  (see  the 
conclusions  of  the Rhodes and  Strasbourg  European  Councils).  Annex 2  of 
the Joint Declaration  signed  in Paris  on  2 October 1989 states  that  the 
European Community may  take part in Audiovisual EUR^A  projects, notably 
through its programmes, but that these projects are not designed to replace 
the  existing  frameworks  of  cooperation,  their  objective  being  rather  to 
extend or supplement them as appropriate.  In practical terms the Community 
will  be  involved  in  two  ways:  the  opening-up  of  Community  projects  to 
professionals of non-member countries (on contractual terms to be defined) 
and Community participation in Audiovisual EURKA  projects which fit into 
the lines of action described earlier. 

The concept of Community  "added-value" will determine Commission action in 
Audiovisual EURHCA. 

The complementarity of the two instruments is facilitated by the difference 
in their nature: 

-  The  action  programme  is  a  coherent  set  of  incentive  measures  acting 
upstream  and downstream  of production proper, with an effect  of  scale 
deriving from the participation of the twelve Community countries; 

-  Audiovisual  EUREKA  offers  a  host  structure  (based  on  the  original 
technological  EURQCA) for helping  professional s  to devise  and  execute 
transnational projects by the multiplication of initiatives, especially 
in  the  production  field.,  with  the  flexibility  afforded  by  the 
involvement of private and public partners in varying proportions. 

The specific characteristics of these two instruments can produce synergy 
of two types: 

3.3.6.2.  The Community action programme extended to include new partners 

The  Community  gain  will  be  enhanced  by  the  effects  of  geographical, 
economic and creative enlargement. 

- 20 -

The professionals of the signatory countries to the Joint Declaration are 
invited  to  participate  in  the  initiatives  of  the  action  programme. 
Accessions will be formalized in agreements between the new non-Camraunity 
participants and those responsible for the project in question within the 
framework  of  the  action  programme.  The  new  participants  will  make  a 
financial  contribution  calculated  on  the  hasts  of  the  operational  and 
management costs of the project. 

The action programme is a Community instrument and will be managed by the 
Commission,  However, extending it to non-Conraunity participants will give 
it much greater œramercial and economic potential. 

3.3.6.3.  The Community as a partner in Audiovisual EURŒA projects 

The  Community  stands  to  gain  from  EURKA  projects  where  the  broader 
dimension might have a positive impact on the activities of the audiovisual 
programmes industry in Europe. 

The Community will be able to participate in Audiovisual  EURffiA projects 
via its action programme.  In each case the arrangements will be specified 
in an agreement. 

Participation will be designed: 

-  to  increase  the  overall  coherence  of  the  various  initiatives  of  the 
action programme by means of participation in projects which build  on 
the measures already undertaken; 

-  to  generate  synergies  between  projects  which,  when  joined  together, 

could have a propulsive effect; 

-  to stimulate the independent production sector; 
-  to help  in creating  a  second market  for  the distribution  of  European 

works; 

-  to provide projects with the extra finance they need in order to use and 
derive  maximum  benefit  from  the  European  new  technologies  applied  to 
programmes (notably HDTV); 

-  to  ensure, by  means  of  support  for  a  project,  that  the  potential  of 

regions "with lesser audiovisual capacity" is used to best effect; 

-  to contribute  to the success of Audiovisual  EUREKA  in order  to attain 

the general objective of boosting Europe's audiovisual capacity. 

The projects which will receive for GDonoraunity support may come under any of 
the  programme's  lines  of  action.  Such  support  will  be  determined  by 
reference to the specific features of each project and according to whether 
the  Audiovisual  EUREKA  ijretrument  is  suited  to  the  objectives.  The 
Advisory Committee of Member States' representatives will give its opinion 
on  the  choice  of  Audiovisual  EUREKA  projects  to  be  supported  by  the 
ODmmunity. 

3.3.6.4.  Other forms of participation in Audiovisual EURffiA 

Finally,  the toraminity will  make  a  contribution -  according  to  the 
percentage  rates  agreed  within  the  Coordinators  Committee -  to  the 
operating  costs  of  the  Audiovisual  EUREKA  Secretariat  and  to  the 
preparatory  work  on  the  European  Audiovisual  Observatory  (and,  if  the 
go-ahead is given, to its establishment). 

4. wirTrnre rmraRAmm  wrm  PBOFESSJICKALS  OP  TOMTtmnNrre HgQFBAK 

- 21 -

This aspect of the programme is of special importance.  Beyond the economic 
development they stimulate, exchanges in the audiovisual field will have a 
decisive  political  impact  on  the  democratic  future  of  the  countries 
concerned  and  on  their  cooperation  with  Ctommunity  Europe.  The aim is 
therefore  to  promote,  horizontally  in all the  lines  of  action  of the 
programme, cooperation between "Western" and "Eastern" professionals. 

The synergies with the industries of those countries can not only  expand 
the market to the benefit of all concerned, but also boost the production 
potential and creativity of Europe as a whole.  The programme will include 
innovatory  joint-venture  formulas, providing in particular  for payment in 
the form of services in view of the lack of financial capacity of the new 
partners. 

For example, 

-  on  the  training  side,  the  operations  undertaken  within  the  action 
programme to improve the economic management of the European audiovisual 
industry and to improve  knowledge  of the market  will  be  particularly 
useful to the professionals from "the East", who will be contending with 
new  problems  posed  by  the  advent  of  a  mixed  economy,  open  to 
competition.  In  exchange,  the Gammunity  professionals  could  benefit, 
for instance, from the excellent instruction imparted in the Polish and 
Soviet cinema schools; 

-  the  application  of  new  European  technologies  will  help  to  impose 
European standards throughout Europe, especially in the field of HDTV; 

-  films produced in some of- the countries in question will be eligible for 
the  Community  schemes  of  loans  to  be  reimbursed  from  receipts; 
Community  films will be distributed in cinemas and on video circuits in 
those countries; 

-  the exchanges of television broadcasts between East and West will help 
to  reduce  the  European  production  deficit  and  also  strengthen  the 
"second market"; 

-  the  collaboration  of  cartoon studios,  such  as  the  Czechoslovak, 
Yugoslav,  Hungarian and other  studios in the European  studios  network 
will  help  to raise  the quality  of their  products  and make  them  more 
competitive. 

It is proposed  that  part  of the financial  allocation  earmarked  for  each 
line of action be devoted  to this type  of cooperation.  The cooperation 
agreements  already  in existence or under discussion with  these  countries 
could, provide a framework for such measures. 

5. QQNCU3SJQN 

The  Council  is requested  to endorse  the objectives  and lines  of  action 
presented above by adopting the decisions annexed.  The first, which 

(4) 

- 22 -

concerns  the  entire  action  programme  other  than  the  specific  training 
measure described  in point 3.3.4.2., would be based on Article 235 of  the 
EEC Treaty. 

The second, which concerns the specific training measure, would be based on 
Article 128 of the EBC Treaty. 

Article 235 may be used only when the Treaty does not provide elsewhere the 
necessary powers to take action.  This is not the case with the training 
measure.  However, the Commission underlines the importance it attaches to 
the  overall  coherence  of  the  programme.  It  considers  the  decision 
proposed  on  the  basis  of  Article 128 as  being  complementary  to  the  one 
based on Article 235. 

- 23 -

Proposal  for a 
COUNCIL DECISION 

concerning the  Implementation of an action programme  to promote 
the development of the European audiovisual  industry  (1991-1995) 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having  regard  to the Treaty  establishing  the European  Economic  Community, 
and  In particular Article 235 thereof, 

Having regard to the proposal  from the Commission,1 

Having regard to the opinion of the European Parliament,2 

Having regard to the opinion of the Economic and Social Commit tee, 3 

Whereas  the Heads of  State and Government  meeting  in the  European Council 
in  Rhodes  on  2 and 3 December  1988  underlined  the  vital  importance  of 
stepping up efforts, including cooperation, to develop Europe's audiovisual 
capacity, in matters such as the free movement of programmes, the promotion 
of  the  European  high-definition  television  system  or  of  a  policy  of 
encouraging  creativity,  production  and  broadcasting  so  as  to  provide  an 
opportunity of demonstrating the wealth and diversity of European culture; 

Whereas the Community already possesses certain  instruments designed  to put 
such a policy  into practice; 

Whereas on  3 October  1989  the Council  adopted  Directive 89/552/EEC  on  the 
coordination  of  certain  provisions  laid  down  by  law,  regulation  or 
administrative action  in Member States concerning  the pursuit of  television 
broadcasting  activities,4  and  that  Directive  contributes  to  the 
establishment  of  a  large  audiovisual  market  which  must  benefit  both  the 
audiovisual  Industry  and  ordinary  citizens  and  which  has  yet  to  be 
consolI dated; 

1  OJ 
2  OJ 
3  OJ 
4  OJ No L 298, 17.10.1989, p. 23. 

-  24 -

Whereas  on  27 April  1989  the  Council  adopted  Decision  89/337/EEC  on  high-
definition  television,5 

Whereas  between  30 September  and  2 October  1989  the  Commission  and  the 
French  Government  Jointly  organized  the  European  Audiovisual  Conference  In 
Paris;  whereas  the  experts  attending  the  meeting  stressed  the  need  for 
stronger  Community  action,  particularly  to  encourage  audiovisual  creative 
work; 

Whereas  the  Joint  Declaration  of  2 October  1989  approved  by  26  European 
countries  and  the  Commission  established  a  transnational  cooperation 
structure entitled  Audiovisual  Eureka; 

Whereas  the  Heads  of  State  and  Government  meeting  in  the  European  Council 
in  Strasbourg  on  8 and  9 December  1989  indicated  that  a  Community  action 
programme  following  on  from  the  Media  (Measures  to  encourage  the 
development  of  the  audiovisual  industry)  programme  should  be  endowed  with 
the  necessary  financial  resources  and  that  the  necessary  synergy  with  the 
Audiovisual  Eureka  initiative should  be  ensured; 

Whereas  on 
the  Council  favourably  received  the  Commission 
Communication  on  audiovisual  policy  setting  out  the priority  objectives  and 
lines  of  action  of  a  Community  policy  to  provide  an  overall  approach  to 
regulatory,  technological  and  industrial  questions  in  the  audiovisual 
sector  and  establishing  a  timetable  for  the  submission  of  the  specific 
proposals  required  for  its  implementation; 

Whereas  the  development  of  the  industrial  aspects  of  this  overall  policy 
will  have  to  be  based  on  the  experience  acquired  and  the  positive  results 
achieved  by  the  Commission  in  applying  the  pilot  phase  of  the  Media 
programme;  whereas  the  evaluation  of  that  phase  carried  out  by  the 
Commission  and  by  a group  of  independent  experts  has  demonstrated  the  need, 
if  Europe's  audiovisual  capacity  is  to  be  expanded,  for  a  longer-term 
programme; 

Whereas,  beyond  the  continuation  and  further  development  of  the  projects 
carried  out  at  the  pilot  phase,  developing  new  pilot  projects  may  have  a 
catalysing  effect  on  areas of  the  European  audiovisual  market  which  have  as 
yet  not  been  adequately  explored; 

Whereas,  to  achieve  maximum  results,  Community  action  must  allow  for  the 
European  dimension  of  the  audiovisual  market,  which  also  entails  taking 
account  of  the  work  to  be  carried  out  within  the  framework  of  Audiovisual 
Eureka; 

Whereas  for  this purpose  encouragement  should  be given,  via  the  appropriate 
instruments  and  in  the  spirit  of  the  Joint  Declaration  of  2 October  1989, 
to  the  development  of  additional  links between  Community  schemes  and  those 
carried  out  within  the  framework  of  Audiovisual  Eureka-, 

5  OJ  No L  142, 25.05.1989, p. 1. 

-  25 -

Whereas,  as  stated  in  the  Joint  Declaration  of  2 October  1989,  Audiovisual 
Eureka  projects  are  not  designed  as  replacements  for  Community  schemes, 
their  purpose  being, where  appropriate,  to extend  or  supplement  them; 

Whereas  it  is  Imperative  that  the  European  audiovisual  industry  match 
supply  to  demand;  whereas  it  must  therefore  act  to  prevent  further 
fragmentation  of  the  markets  and  overhaul  its  production  and  distribution 
structures, which  are  too narrow  and  do not  yield  an  adequate  return; 

Whereas,  in this  context,  special  attention  needs  to  be  given  to  small  and 
lesser 
medium-sized  businesses  and  to  the  Community 
audiovisual  capacity,  when  organizing  market  structures;  whereas  action 
must  therefore  be  taken  to  ensure  all  appropriate  coordination  with  the 
Community  Initiatives now under  way  in these  fields-, 

regions  with 

Whereas  in  the  development  of  the  programme-making  industry  proper  regard 
should  be  had  for  the  different  cultural  identities  of  the  various 
countries  and  regions;  whereas,  in  the  same  spirit,  account  needs  to  be 
taken  of  the  position  of  regions  in  Europe  with  less  widely  spoken 
I anguages; 

Whereas  the  development  of  the  programme-making  industry  calls  for  a 
mastery  of  new  technology  and  should  enable  economies  of  scale  to be made; 

Whereas  increased  use  of  new  forms  of  European  technology,  particularly 
high-definition  television  and  in  the  areas  of  audiovisual  programme 
production  and  distribution,  may  help  to  enhance  the  value  of  the 
technologies  in question; 

Whereas  the  response  to  the  cultural,  technological  and  industrial 
challenges  generated  by  evolving  communications  techniques  and  the  growing 
requirement  for  audiovisual  programmes  Is to be  found  first  and  foremost  in 
the commitment  and  drive  displayed  by  the  professionals; 

Whereas  the  media  professionals  and  the  Member  States  must  be  closely 
involved  in  developments  during  the  main  phase  of  the  programme;  whereas 
the  exchange  of  information  and  experience  and  consultation  between  the 
various  parties  involved  and  the  Commission  are  vital  to  the  task  of 
enhancing  the  effectiveness  and  overall  cohesion  of  the  Community's 
audiovisual  policy  as a whole; 

Whereas  the  purpose  of  the  Community's  action  in  this  area  must  not  be  to 
try  to  stand  in  for  but  to  supplement  and  extend  what  Is being  done  by  the 
authorities  in  the  Member  States;  whereas  establishing  machinery  for 
liaison, cooperation  and  training  complements  national  moves; 

Whereas  the  primary  aim  of  financial  input  from  the  Community  must  be  to 
arouse  interest  and  contributions  from  additional  sources  of  financing 
supplied  by  interested  parties,  thereby  having  a  multiplier  effect  on  the 
development  of  the audiovisual  industry-, 

Whereas measures  designed  to establish  the  internal  market  in stages over  a 

- 26 -

period ending on 31 December  1992 need  to be adopted; whereas  the  Internal 
market  comprises  an  area  with  no  Internal  frontiers  In which  freedom  of 
movement  for goods, people and services  is guaranteed; 

Whereas,  to  attain  the  objectives  of  the  Community  as  stipulated  in 
Article 2 of  the Treaty,  it  is clearly  necessary  to  promote  the  European 
audiovisual  programme-making  industry  as  part  of  the  operation  of  the 
single, market ; whereas, since  the Treaty  makes  no  provision  for  specific 
powers for that purpose, it is necessary to rely on Article 235; 

Whereas the estimated  requirement  in terms of  the Community's contribution 
to  the  proposed  programme  is for  235 million ECU,  to be  spread  over  five 
years from 1991 onwards; whereas the allocations will  be determined  on the 
basis of  the  financial  perspectives  and within  the  limits of  the  amounts 
available for each year's budget, 

HAS DECIDED AS FOLLOWS: 

Article 1 

An action programme  to promote the development of  the European  audiovisual 
industry, called  "Media", is hereby adopted for a period of five years from 
1 January 1991. 

The aims of the programme shall be as follows: 

Article 2 

-  to  help  establish  a  European  audiovisual  area  within  which  Community 
firms will  act  as  a driving  force  alongside  those  from  other  European 
countr les-, 

to stimulate and  increase the capacity of European  film and  audiovisual 
programme makers to supply on competitive terms, with special  regard for 
the  role  and  requirements  of  small  and  medium-sized  businesses,  the 
legitimate  interests of creators and the position of countries  In Europe 
with  smaller  audiovisual  production  capacities  or  less  widely  spoken 
languages; 

-  to step up  intra-European exchanges of  films and audiovisual  programmes 
and,  with  a  view  to  securing  a  better  return  on  investment,  to  make 
maximum  use of  the various means of  distribution which  either  exist or 
are still  to be set up  in Europe-, 

-  to  contribute  towards  European  production  and  distribution  companies 

being able to obtain a  larger share of world markets: 

-  to  promote  and  enhance  the  value  of  the  new  European  communications 
technologies  in the production and distribution of audiovisual material; 

-  to encourage an overall  approach which allows for the  interdependence of 
the  various  audiovisual  sectors  and  ensures  that  moves  undertaken  at 
level  complement  those  undertaken  at  European  level. 
national 

- 27 -

Article 3 

To attain the objectives set out  In Article 2, the following measures shall 
be put  Into effect  In accordance with the procedure  laid down  In Article 7: 

-  the  Improvement  of  mechanisms  for  the  distribution  of  European 
productions,  in  particular  through  the  establishment  of  specialist 
networks, support  for multilingualism and market  access for  independent 
productions; 

-  the  improvement of the production environment, with particular  reference 
to  the  development  of  screenplay-writing  and  pre-production,  the 
application  of  new  forms  of  technology,  including  high-definition 
television,  the  development  of  specific  sectors  such  as  animation  and 
the creation of a "secondary market", notably by making use of archives; 

-  the creation of a climate favourable to the financing of production and 
co-production  schemes,  particularly  by  encouraging  the  setting-up  of 
European venture-capital and guarantee-fund networks; 

-  the promotion of new audiovisual  services, particularly  those which use 
techniques  for  disseminating  and  transferring 

new  audiovisual 
Informat Ion-, 

-  the  development  of  the  audiovisual  potential  of  regions  with  smaller 
production  capacity  or  less  widely  spoken  languages,  particularly 
through  the establishment  of  transnational  networks  of  media  promotion 
and development agencies; 

the  encouragement  of  cooperation  between  audiovisual  professionals  in 
the Member  States  and other  European  countries, especially  Central  and 
Eastern Europe. 

These measures are described  in greater detail  in Annex  I. 

Article 4 

The  implementation  of  the  action  programme  shall  also  involve  Community 
participation  in Audiovisual  Eureka projects which complement or extend the 
measures  described  in Article 3  and  satisfy  the  conditions  for  Community 
involvement set out  in Annex II. 

The  Community  shall  also  contribute  to  the  operating  costs  of  the 
Audiovisual  Eureka  Secretariat  [and  to  the  setting-up  of  the  European 
Audiovisual  Observatory], 

Article 5 

The resources allocated to the measures provided  for  in the programme shall 
procedure. 
be  determined 

budgetary 

framework 

in  the 

the 

of 

-  28 -

Article  6 

As  a  rule, parties  to contracts with  the Commission  for  the  implementation 
of  the  measures  provided  for  in  Article 3  must  provide  a  substantial 
proportion of  the  funding, representing at  least  50% of  their  total  cost. 

Article  7 

1. The  Commission  shall  be  responsible  for  Implementing  the  action 

programme. 

2. For  the  purpose  of  implementing  the  action  programme  the  Commission 
shall  be  assisted  by  a  committee  of  an  advisory  nature,  consisting  of 
the  representatives  of  the  Member  States  and  chaired  by  the 
representative of  the Commission. 

The  representative  of  the  Commission  shall  submit  to  the  committee  a 
draft  of  measures  to be  taken.  The  committee  shall  deliver  its  opinion 
on  the  draft  within  a  time  limit  which  the  chairman  may  lay  down 
according  to the urgency  of  the matter,  if necessary  by  taking  a vote. 

The  opinion  shall  be  recorded  in  the minutes;  in  addition,  each  Member 
State  shall  have  the  right  to ask  to  have  his  position  recorded  in  the 
minutes. 

The Commission  shall  take  the utmost  account  of  the opinion  delivered  by 
the committee.  It shall  inform  the committee  of  the manner  in which  its 
opinion  has been  taken  into account. 

3. The matters on which  the Commission  consults  the committee  shall  include 

the fol lowing: 

-  priority  schemes; 
-  the criteria  for  selecting  projects and  contractors; 
-  the allocation of  funding  for  priorities; 
-  financial  contributions within  the meaning  of  Article  4; 
-  the evaluation  of  projects; 
-  exceptions  to Article  6; 
-  the evaluation  of  the programme  for  the purpose of  drawing  up  the 

report  provided  for  in Article  8. 

- 29 -

Article 8 

After  the  programme  has  been  in operation  for  two  years,  the  Commission 
shall  present  a report on the results achieved  to the European Parliament, 
the Council and the Economic and Social Committee. 

At  the  expiry  of  the  programme,  the  Commission,  in  accordance  with  the 
procedure  laid down  in Article 7, shall send a report on the  Implementation 
and  results of  the  programme  to the  European  Parliament,  the  Council  and 
the Economic and Social Committee. 

Done at Brussels, 

For the Council 
The President 

5) 

- 30 -

ANNEX  I : Measures 

and  Indicative breakdown of costs (ECU million) 

1. 

Distribution mechanisms 

1.1  Distribution of films In cinemas 

100 

40 

Significant development of action taken by EFDO (European Film 
Distribution Office) to promote the cross-frontier distribution of 
European films  in cinemas; extension of this support system  to works 
produced at a cost of up to ECU 4 500 000; 

Measures to promote European films outside the Community  (offices for 
the promotion of European films and television programmes, group 
presence at festivals and on fairs); 

Study and  implementation of measures to promote the film sector 
(cinemas) -, 

1.2  Distribution on video cassette and television broadcasting 

20 

Prolongation of the EVE measure (European Video Area), which  is a 
system of advances on receipts to promote the production and cross-
frontier distribution of European works.  Extension of the system, by 
creating networks of médiathèques and public  libraries to promote the 
output of programmes on video cassette; 

Encouragement  for the broadcasting by television stations of 
programmes produced by  independent European producers. 

1.3  Support  for multilingualism  in television programmes 

10 

Extension of the BABEL scheme ("Broadcasting Across the Barriers of 
European Language"), to promote the circulation of European products 
designed  for television; 

Support  for the development of multilingual  television stations; 

Undertake with  the framework of BABEL, measures for perfecting the 
skills of  journalists and other audiovisual  professionals working  in 
a multilingual environment. 

1.4  Development of markets for  independent producers 

30 

Intensification of the EURO-AIM scheme, a services structure which 
organizes the group presence of  independent  producers on 
international markets and gives them advice;  it will: 

- 31 -

- ensure a more conspicuous European presence on the major markets; 

- highlight particular sectors of production (archives, 

documentaries, youth  interests, etc.); 

- develop promotional activities on non-Community markets-, 

- develop the services available to small producers; 

- computerize the compilation and dissemination of data on 

independent European production. 

2. 

Improvement of production conditions 

2.1  Development of preproductlon 

90 

25 

Development of the European SCRIPT Fund (encouragement  for the 
development of screenplays and preproductlon) by  increasing  its 
financing capacity and providing, in addition, professional  services 
such as: 

- assistance  In the field of script writing; 

- assistance with regard to the financing of production. 

Extension of aid for development and preproductlon to companies 
presenting  "packages" of programmes; 

Extending these measures (intended primarily for works of fiction) to 
creative documentaries; 

Developing, within the framework of SCRIPT, the professional  skills 
of European screenplay writers,  in particular by organising  "script 
doctoring" sessions; 

2.2  Restructuring of the animated cartoon  industry 

25 

Encouragement  for the formation of networks of production studios by 
cofinaneing coordination and management costs; ensure that the 
complementary measures for the transfer of know-how between the 
cartoonists, studio managers and graphics coordinators who will be 
needed to form these networks are taken; 

Contributing  to the harmonization and computerization of production 
modes and to the  industrialization of working methods; 

Support  for the production of  "pilots" by providing seed capital  in 
the form of advances on receipts; 

Development of an  information system specific to the European 
animated cartoon  industry based on meetings between producers and 
distributors as well as the computerization of professional 
Informat ion. 

- 32 -

2.3  Promotion of the use of new European technologies  in the production 

of programmes 

25 

Extension of the activities of the MEDIA  Investment Club: 

- by  increasing the number of  Its members, 

- by  issuing  invitations to tender so as to encourage  innovative 

projects, 

- by providing support for measures designed to promote the 

production of films and programmes using the European HDTV standard 
(in  liaison with EUREKA-Audlovlsual and EEIG "Vision 1250"). 

- by promoting schemes for the  initiation of professionals  in the 

use,  in the production of audiovisual works, of new techniques in 
Image synthesis, digital TV, high-definition TV and  interactive TV. 

2.4  Contribution to the establishment of a "Second Market", using archive 
15 

material 

Support  for the operation and consolidation of MAP-TV  (linking up of 
European archives services); 

Turning this "memory bank" to advantage by reissuing and 
rebroadcasting works or by using them for the production of new 
serles; 

Research  into and experimentation with solutions for the problems 
concerning  royalties, which hamper  the use of archives; 

Production of catalogues to be used for the promotion of archives. 

3. 

StImulation of financial  investment 

Encouragement  for the establishment and development of structures 
designed  to mobilize and stimulate  investors (risk-capital  fund, 
guarantee fund, investment pools, etc.). 

4. 

Other measures 

15 

30 

Continuing  to explore new areas  in order  to adapt  the action 
programme to developments  in the European audiovisual  sector.  For 
example,  in the following fields: 

- promotion of new audiovisual  programme services using new 

broadcasting  technologies  (development of experiments  in fields 
such as  interactive communication, subject channels, etc.); 

- 33 -

- development of potential  in Community countries and regions with 

smaller audiovisual  capacity or  limited  language area; 

5. 

Promotion of cooperation with professional  circles  In Central 
and Eastern European countries. 

p.m. 

Part of the financial allocation for each of the  lines of action 
(1 to 4) will be devoted to this type of cooperation. 

TOTAL 

235 

#' 

- 34 -

ANNEX II 

Community  Involvement  in Audiovisual  EUREKA 

Both Community policy and Audiovisual  EUREKA are pursuing the same general 
objective, i.e. to boost Europe's audiovisual  capacity  In accordance with 
the conclusions of the Rhodes and Strasbourg European Councils.  In this 
connection, Annex 2 to the Joint declaration signed  in Paris on 
2 October  1989 concerning Audiovisual  EUREKA states that the European 
Community may take part  in Audiovisual  EUREKA projects, particularly 
through  Its programmes, but that these projects are not designed  to replace 
the existing cooperation frameworks, their objective being rather  to extend 
or supplement  them as appropriate.  In practical  terms, the Community will 
be  involved  in two ways-, the opening-up of Community projects to 
professionals of non-member countries (on contractual  terms to be defined) 
and Community  involvement  in Audiovisual  EUREKA projects which fit  into the 
lines of action described  in Annex 1. 

The concept of Community  "added value" will determine Commission action in 
Audiovisual EUREKA. 

The positive complementarity between the Community action programme and 
Audiovisual  EUREKA  is helped by the difference  in their nature: 

The action programme  Is a coherent set of  incentive measures acting 
upstream and downstream of production proper with an effect of scale 
deriving from the participation of the twelve Community countries-, 

Audiovisual  EUREKA offers a host structure (based on the original 
Technological  EUREKA) for helping professionals to devise and execute 
transnational projects by the multiplication of  initiatives 
especially  in the production field, with the flexibility  afforded by 
the  involvement of private and public partners  in varying 
proport ions. 

The specific characteristics of these two  instruments can produce synergy 
of two types: 

1. 

The Community action programme extended  to include new partners 

The Community gain will be enhanced by the effects of geographical, 
economic and creative enlargement. 

The professionals of the signatory countries to the "Joint Declaration" are 
invited to participate  in the  initiatives of the action programme 
Accessions will be formalized  in agreements between the new non-Community 
participants and those responsible for the project  in question within the 
framework of the action programme.  The new participants will make a 
financial  contribution calculated on the basis of the operational  and 
management costs of the project. 

- 35 -

The action programme  is a Community  instrument and will be managed by the 
Commission assisted by the Advisory Committee provided for  In Article 7. 
However, extending  it to non-Community participants will give  it much 
greater commercial  and economic potential. 

2. 

The Community as a partner  In Audiovisual EUREKA projects 

The Community stands to gain from EUREKA projects, where the broader 
dimension could have a positive  impact on the activities of the audiovisual 
programmes  Industry  In Europe. 

The Community will be able to take part  in Audiovisual  EUREKA projects via 
its action programme.  In each case the arrangements will be specified  in 
an agreement. 

Participation will be designed: 

to increase the overall coherence of the various  initiatives of the 
action programme by means of participation  In projects which build on 
the measures already undertaken; 
to generate synergies between projects which, when Joined together, 
could have a propulsive effect; 
to stimulate the  independent production sector; 
to help  in creating a second market for the distribution of European 
works; 
to provide projects with the extra finance they need  in order  to use 
and derive maximum benefit from the European new technologies applied 
to programmes (notably  HDTV); 
to ensure, by means of support  for a project, that the potential of 
regions "with  lesser audiovisual  capacity"  is used to best effect-, 
to contribute to the success of Audiovisual  EUREKA  in order  to attain 
the general objective of boosting Europe's audiovisual  capacity. 

The projects which will  receive Community  support may come under any of the 
lines of action of the programme described  in Article 3. Such support will 
be determined by reference to the specific features of each project and 
according  to whether  the Audiovisual  EUREKA  instrument  is suited to the 
objectives.  The Advisory Committee of Member  States' representatives will, 
as provided  for  in Article 7, give  its opinion on the Audiovisual  EUREKA 
projects to be supported by the Community. 

3. 

Other forms of participation in Audiovisual  EUREKA. 

The Community will make a contribution - according  to the percentage rate 
agreed within the Coordinators' Committee - to the operating costs of the 
Audiovisual  EUREKA Secretariat  and to the preparatory work for the 
establishment, should this be so decided, of the European Audiovisual 
Observatory. 

-  36  -

Proposal  for  a 
COUNCIL  DECISION 

concerning  the  implementation  of  a  Community  vocational  training 
m e a s u re  in  the  audiovisual  sector 

THE  COUNCIL  OF  THE  EUROPEAN  C O M M U N I T I E S, 

Having  regard  to  the  Treaty  establishing  the  European  E c o n o m ic  C o m m u n i t y, 
and  In  particular  A r t i c le  128  thereof, 

Having  regard  to  the  proposal  from  the  C o m m i s s i o n ,1 

Having  regard  to  the  o p i n i on  of  the  European  P a r l i a m e n t ,2 

Having  regard  to  the  o p i n i on  of  the  Economic  and  Social  C o m m i t t e e ,3 

1  OJ 
2  OJ 
3  OJ 

••# 

tVft 

-  37 -

Whereas  the  Heads  of  State  and  Government  meeting  In  the  European  Council 
In  Rhodes  on  2 and  3 December  1988  underlined  the  vital  Importance  of 
stepping  up  efforts,  including  cooperation,  to develop  Europe's  audiovisual 
capacity,  In matters  such  as  the  free movement  of  programmes,  the  promotion 
of  the  European  high-definition  television  system  or  of  a  policy  of 
encouraging  creativity,  production  and  broadcasting  so  as  to  provide  an 
opportunity  of  demonstrating  the wealth  and  diversity  of  European  culture; 

Whereas  the Community  already  possesses  certain  instruments  designed  to put 
such  a policy  into practice; 

Whereas  on  3 October  1989  the  Council  adopted  Directive 89/552/EEC  on  the 
coordination  of  certain  provisions  laid  down  by  law,  regulation  or 
administrative  action  In Member  States  concerning  the  pursuit  of  television 
broadcasting 
the 
that 
establishment  of  a  large  audiovisual  market  which  must  benefit  both  the 
audiovisual  industry  and  ordinary  citizens  and  which  has  yet  to  be 
consolidated; 

activities,4  and 

contributes 

Directive 

to 

Whereas  between  30 September  and  2 October  1989  the  Commission  and  the 
French  Government  jointly  organized  the  European  Audiovisual  Conference  in 
Paris;  whereas  the  experts  attending  the  meeting  stressed  the  need  for 
stronger  Community  action,  particularly  in  the  field  of  vocational 
training-, 

Whereas  the  Joint  Declaration  of  2 October  1989  approved  by  26  European 
countries  and  the  Commission  established  a  transnational  cooperation 
structure  entitled  Audiovisual  Eureka; 

Whereas  the  Heads  of  State  and  Government  meeting  in  the  European  Council 
in  Strasbourg  on  8 and  9 December  1989  indicated  that  a  Community  action 
programme  following  on  from  the  Media  (Measures  to  encourage  the 
development  of  the  audiovisual  industry)  programme  should  be  endowed  with 
the  necessary  financial  resources  and  that  the  necessary  synergy  with  the 
Audiovisual  Eureka  initiative  should  be  ensured; 

the  Council  favourably  received  the  Commission 
Whereas  on 
Communication  on  audiovisual  policy  setting  out  the  priority  objectives  and 
lines  of  action  of  a  Community  policy  to  provide  an  overall  approach  to 
regulatory,  technological  and  industrial  questions  in  the  audiovisual 
sector  and  establishing  a  timetable  for  the  submission  of  the  specific 
proposals  required  for  its  implementation; 

Whereas  the  development  of  the  industrial  aspects  of  this  overall  policy 
will  have  to  be  based  on  the  experience  acquired  and  the  positive  results 
achieved  by  the  Commission  in  applying  the  pilot  phase  of  the  Media 
programme;  whereas  the  evaluation  of  that  phase  carried  out  by  the 
Commission  and  by  a group  of  independent  experts  has  demonstrated  the  need 
for  more  transnational  cooperation  on  vocational 
in  the 
audiovisual  sector; 

training 

4  OJ  No L 298, 17.10.1989, p. 23. 

-  38 -

Whereas  for  this purpose encouragement  should  be given, via  the  appropriate 
Instruments  and  In  the  spirit  of  the  Joint  Declaration  of  2 October  1989, 
to  the  development  of  additional  links between  Community  schemes  and  those 
carried  out  within  the  framework  of  Audiovisual  Eureka  relating  to 
vocational  training; 

Whereas,  in this  context, special  attention  needs  to  be  given  to  small  and 
medium-sized  businesses  and  to  the  Community  regions  with  smaller 
audiovisual  capacity,  when  organizing  market  structures;  whereas  action 
must  therefore  be  taken  to  ensure  all  appropriate  coordination  with  the 
Community  initiatives now under  way  in these  fields; 

Whereas  the  primary  aim  of  financial  input  from  the  Community  must  be  to 
arouse  Interest  and  contributions  from  additional  sources  of  financing 
supplied  by  interested  parties,  thereby  having  a  multiplier  effect  on  the 
development  of  the audiovisual  industry; 

Whereas  a  measure  concerning  vocational  training  needs  to  be  added  to  the 
other  Community  measures  designed  to  promote  the  development  of  the 
European  audiovisual  industry;  whereas  these measures must  be  conducted  in 
para I lei -, 

Whereas  the  estimated  requirement  in terms of  the  Community's  contribution 
to the proposed  measure  is for  15 million  ECU, to be  spread  over  five  years 
from  1991  onwards; whereas  the  allocations will  be  determined  on  the  basis 
of  the  financial  perspectives  and  within  the  limits  of  the  amounts 
available  for  each  year's budget, 

HAS DECIDED  AS FOLLOWS: 

Article 1 

A  Community  measure  for  the  development  of  vocational  training  in  the 
audiovisual  programmes  industry  covering  a  period  of  five  years  from 
1  January  1991  is hereby  adopted. 

Article  2 

The  aim  of  the  Community  measure  shall  be  to  help,  In  particular  by 
improving  the  skills  of  audiovisual  professionals  in  the  Community  in 
economic  and  commercial  management,  to  establish  conditions  in  which 
undertakings  in  the  sector  can  derive  maximum  benefit  from  the  dimension 
offered  by  the single market. 

- 39 -

Article 3 

To attain  the objective  referred  to  in Article  2 transnational  vocational 
training  schemes  In economic  and  commercial  management  shall  be  developed 
in  the  sectors  of  film  and  audiovisual  programme  production  and 
distr ibut ion. 

Article 4 

The  implementation of  the measure may also  involve Community  participation 
in Audiovisual  Eureka projects which complement or extend the measure. 

The resources allocated to the measure shall be determined  In the framework 
of the budgetary procedure. 

Article 5 

Article 6 

As a rule, parties to contracts with the Commission  for  the  implementation 
of  the  measure  must  provide  a  substantial  proportion  of  the  funding, 
representing at  least 50% of their total cost. 

Article 7 

1. The Commission shall  be responsible for  implementing  the measure and for 
ensuring  coordination  with  other  Community  measures  to  promote  the 
development of the European audiovisual  industry. 

2. The Commission  shall  be assisted  by a committee of  an  advisory  nature, 
consisting  of  the  representatives of  the Member  States  and  chaired  by 
the  representative of  the Commission.  The committee  shall  be  the one 
provided  for  in Council Decision 90/  /EEC5-  to  assist  the  Commission 
in  Implementing  the action programme  to promote  the  development  of  the 
European audiovisual  industry (1991-1995). 

The  representative  of  the  Commission  shall  submit  to  the  committee  a 
draft of measures to be taken.  The committee shall  deliver  its opinion 
on  the  draft  within  a  time  limit  which  the  chairman  may  lay  down 
according to the urgency of the matter, if necessary by taking a vote. 

5. OJ No 

- 40 -

The opinion  shall  be  recorded  in the minutes;  In addition, each  Member 
State shall  have  the right  to ask  to have his position  recorded  In the 
minutes. 

The Commission shall  take the utmost account of the opinion delivered by 
the committee.  It shall  inform the committee of the manner  In which  its 
opinion has been taken  into account. 

3. The matters on which the Commission consults the committee shall  include 

the fol lowing: 

- the criteria for selecting contractors; 
- financial contributions within the meaning of Article 4; 
- exceptions to Article 6; 
- the evaluation of the programme for the purpose of drawing up the 

report provided  for  in Article 8. 

Article 8 

After  the measure has been  in operation for two years, the Commission shall 
present  a  report  on  the  results  achieved  to  the  European  Parliament, the 
Council and the Economic and Social Committee. 

At  the  expiry  of  the  measure,  the  Commission,  In  accordance  with  the 
procedure  laid down  in Article 7, shall send a report on the  implementation 
and  results of  the  programme  to  the  European  Parliament,  the  Council  and 
the Economic and Social Committee. 

Done at Brussels, 

For  the Council 
The President 

~Ll4-

ENCOURAGING EUROPE'S MEDIA INDUSTRY 

A Review of MEDIA 92 

by 
a Committee  of Experts appointed 
by the European  Commission 

March 19')0 

ENCOURAGING  EUROPE'S MEDIA  INDUSTRY 

A Review of MEDIA  92 

Preface 

We were  invited  in January  by  the European  Commission  to  carry 

out an evaluation  of the MEDIA  92 Programme, to be delivertîd  by 

the middle of March.  This required  us to work  intensively  if 

we were to make what we  regarded  as the necessary  inquiries 

into each of the projects, and  the  impact of  the  Programme  as a 

whole. 

The Committee  held  seven  formal meetings.  In addition,  each 

member carried  out  a number  of  personal  inquiries  into  the 

impact on users  of  the various  projects.  We met  the  Directors 

of MEDIA  92 on  three  occasions  and  the  co-ordinators  of  each 

project  at  least once.  Members  of  the Committee  paid  visits  to 

projects  located  in Hamburg  and Paris. 

We would  like  to express  to  all  those  concerned  with  MEDIA  92 

and  its projects  our  appreciation  of their  co-operation.  We 

would  also wish  to put on  record  the valuable  research  and 

drafting  assistance  we  received  from Mr  Hanno  Fry, our 

editorial  assistant. 

Sir Ian Trethowan  (Chairman) 

Mr Bo  Christensen 

Mr Enrique  De Las  Casas 

Mr Massimo  Fichera 

Mr Hans Tijssen 

kl 

TABLE OF  CONTENTS 

Preface 

1. 

Introduction 

1.1. 

The Role of MEDIA  92 

1.2. 

MEDIA'S  Financing 

1.3. 

The Committee's  View  of MEDIA  92's  Performance 

2. 

Summary 

2.1. 

General  Recommendations 

2.2. 

Specific  Recommendations 

3. 

EFDO 

4. 

European  Script  Fund 

5. 

EAVE 

6. 

CARTOON 

7. 

MEDIA  INVESTMENT  CLUB 

8. 

MEDIA  VENTURE 

9. 

EURO-AIM 

10. 

BABEL 

11. 

EVE 

12. 

Comments  On Matters  Outside  The  Immediate  Remit 

13. 

Epilogue 

M 

MEDIA  92  REPORT 

1.  Introduction 

The European  film  and  television  industries  reflect  both  the 

benefits  and  drawback's of  the Community's diversity  - a rich 

and varied  creative  and  cultural  tradition, but  a  fragmented 

distribution  system  and  a lack  of a common  language.  More 

films are made  each  year  in Europe  than  in the United  States, 

and many win  international  awards, but  80% of  them never  cross 

the  frontiers  of  their  country  of origin. 

The Community  has  affirmed  its  intention  to take  positive 

action  to  foster  a distinctive  European  audio-visual  industry, 

most  recently  at  the Strasbourg  summit, and  in  the  Commission's 

statement  to  the Council  of Ministers  which  proposes  an  action 

programme. 

From our  own  individual  experiences, we  can  say  that  the 

Community's  positive  approach  has been  a strong  encouragement 

to the European  film  and  television  industries.  The  crucial 

role played  by  television  in  recent events  in Eastern  Europe 

has provided  a timely  reminder  of  the unique  power  of  the 

media, and  of  the  fact  that  any  society must  be  actively 

concerned  in ensuring  that  :.ts audio-visual  industries  develop 

beneficently, and  provide  a true  and distinctive  reflection  of 

the peoples  it serves. 

1.1. 

The  Role  of MEDIA  92 

The MEDIA  92 Programme was  «et up to try  and  create  more 

co-operation  in  the  European  audio-visual  industry,  (cf.l 

below).  Even  the  longest-running  of  its nine projects  is  still 

in its infancy, but  it is already  clear  that MEDIA  has 

1.  Programme d'action en faveur  àe. la production 
audiovisuelle européenne, cormriinication de la Commission au 
Conseil, COM (06) 255 final 

-</i' 

demonstrated  the potential  to create  the coherence  and 

co-ordination  which  the European  film  and  television  industry 

needs  so critically, and which  the Commission  seeks. 

Through MEDIA  92,  the Community  can try  to ensure  that, as  its 

economic  and political  initiatives  draw closer  together,  its 

constituent  national and  regional groupings  are encouraged  to 

maintain  their  individuality  and  diversity, while  at the  same 

time contributing  to a  strong  and distinctive  European  identity. 

Film and  television  are where  culture  and  economics  cross.  At 

present  the European  industry  is  strong  in creative  talent  and 

professional  skills, but  it is relatively  weak  economically. 

Strengthening  the media  in Europe will  strengthen  both  European 

culture  and  European  economies;  both will  suffer  if  some 

strengthening  is  not  implemented.  We have  no doubt  that  an 

expanded  MEDIA  programme wh:.ch pays especial  attention  to  those 

regions  and  aspects of  the  Industry which  are  at  present 

relatively  weak,  is crucial  if the  European  audio-visual 

industry  is  to provide  employment  and maintain  a distinctive 

European  presence  on  the screens. 

1.2. 

MEDIA'S  Financing 

We attach  great  importance  to  the underlying  financial 

philosophy  of MEDIA  92.  It  is, in  their  own words, "not a 

subsidy machine".  On  the contrary,  they would  aim, over  a  five 

years action  programme, to bring  their  operations  to  financial 

autonomy.  With  regard  to the  administrative  costs of  the  MEDIA 

92 projects, these  at the moment  are usually  paid  partly  by  the 

Commission  and partly  by  the host country.  We  feel  that  in 

future  these  should  be borne» in their entirety  by MEDIA  92, and 

should  be  regarded  as repayable  loans. 

With most of  the projects, MEDIA  92 offers  seed money,  which 

has to be matched  by money  from  other,  frequently  commercial 

sources.  Commercial  participation  is important, alongside^ that 

H 

of public  broadcasters.  If the European  film and  television 

industries can evolve more  co-operation  and  co-production,  they 

should become more  financially  viable. 

1.3. 

The Committee's  View of MEDIA  92's  Performance 

We shall  in our  report  suggest  that  some of  the projects  would 

benefit  from increased  fundLng by  the European  Commission, and 

we shall  also make  a  few criticisms  of  the existing  programme 

and  suggest  some  changes.  3ut we  have been  impressed  by  the 

efficiency  and  the  realism  of  the  small MEDIA  Programme  central 

unit and most of  the project  teams. 

Our review of  the MEDIA  92 projects  has been  largely  ad hoc. 

We have made  ourselves  acquainted  with  some  of  the  plans 

MEDIA  92 has been developing  for an expanded  programme  but we 

have not been  in a position  to consider  them  in any  detail.  We 

note that many, but  not  all  of  the recommendations  of  the 

Commission's  1986 programme  have  been  implemented;  several  new 

features  have  found  our  explicit  approval, e.g.  the  creation  of 

CARTOON.  In other  cases we  have  re-emphasised  points  made  in 

the original  document  but  not  implemented,  e.g.  the  close 

association  between  distribution  in  film,  television, and 

video.  We  have  not, however,  in the relatively  short  time 

available  to us, made  a sysiiematic  assessment  of  the whole  area 

We believe  that  the  time  has  come  for MEDIA  92, and  indeed 

other  European  initiatives, to be placed  clearly  in a wider 

context.  We  recommend  there  should  be a systematic  and 

thorough  study  of the entire; audiovisual  industry  to  establish 

the specific  needs which  have  to be  filled  in Europe  and  to 

co-ordinate  the various  initiatives  aimed  at meeting  those 

needs.  With  this as background,  and mindful  of  the  rapid 

changes  that  some of  the projects may  be expected  to undergo, 

we recommend  that MEDIA  92 should  be assessed  again  in  about 

two years'  time.  With  this we  couple  the  immediate 

- te 

recommendation  that all projects should establish targets and 
criteria for assessment. 

Before turning to the separate projects, there is one general 
point we would make.  The MEDIA Programme  is, we understand, 
precluded  from supporting individual productions directly. 
This is justified since the Commission  should not itself choose 
programmes.  There should ba no restriction, however, on 
support of production by the projects of MEDIA  92.  Most film 
and television productions nowadays are based on a financial 
package which includes an agreement under which the 
distributor, for film, or the broadcaster, for television, 
advances a substantial .sum of money to the producer before 
production begins. 

Since the central reason for creating MEDIA  92 is to encourage 
much greater co-operation between the national  audiovisual 
industries within the Community,  it is essential  that the 
relevant projects should be free" to foster co-production based 
on partnerships between producers and distributors. 

One further general point: If expanded MEDIA  92 is to be fully 
effective across the Community, we believe that  it should take 
stronger steps to publicise not only the umbrella  organisation 
but each individual project. 

k* 

2.  SUMMARY 

2.1.  General  Recommendations 

1. 

The work  of MEDIA  92 should be expanded  into  a  five  year 

action plan  according  to established  targets  and methods  of 

assessment; 

2. 

All major  MEDIA  92 projects  should  aim  to be 

self-financing within  that  five year  term; 

3. 

Efforts  should  be. made  to harmonise  the  roles  of MEDIA  92 

with  those of  other  European  audio-visual  projects; 

4. 

MEDIA  92  should  take  steps  to make  its  individual 

projects more  widely  known within  the European  industry; 

5. 

The work  of MEDIA  92 s;hould be  reassessed  in two  years' 

time, after  a  systematic  and  thorough  study  of  the  European 

audio-visual  industrv  as  a whole; 

2.2.  Specific  Recommendations 

1) 

EFDO  should  be given  a substantial  increase  in  funding. 

Its basic  limit  to production  budgets  should  be  raised  to 

3 million  ecu  and  it should  take  special  steps  to  encourage 

production  in very  low budget countries; 

The  European  Script  Fund  should  expand  substantially,  and 
2) 
should  be given  extra -funding to  take  its  approved  projects  to 
the production  stage; 

3) 

EAVE  should  be continued,  but  subject  to its courses  being 

inter-disciplinary,  to consideration  of cost  effectiveness  and 

duplication, and  to MEDIA  92 promoting  additional 

- ^ 5-

inter-professional  advanced  training  in connection  with 

existing  film and  television  institutions; 

4) 

CARTOON  should  be given  a substantially  increased  budget, 

and  encouraged  particularly  to  form  links with  Eastern  Europe; 

5) 

The MEDIA  INVESTMENT  CLUB  should  continue  to be  supported, 

but the extent of MEDIA  92's  financial  involvement  should  be 

reviewed; 

6)  MEDIA VENTURE does not  require  the continued  involvement 

of MEDIA 92; 

7) 

EURO-AIM  should  be encouraged, but producers  should  be 

charged  for using  its services; 

8) 

BABEL  is potentially  a very  important  project, but 

MEDIA  92 will  need  to  introduce  a new and expanded  structure; 

9) 

EVE  should  be merged  with  EFDO, or  at  least work  very 

closely with  it. 

So 

3.  EFDO - European Film Distribution  Office 

Considering  that  so many  films  are made  in Europe  and  yet  not 

distributed, we consider  that  this  is one of  the  central 

projects of the MEDIA 9-2 Programme. 

Its object  is to stimulate  the distribution  of  films with 

budgets below  2.25  million  ecu; the Office uses a  loan  fund  of 

2 million ecu and  an administrative  budget  of  0.35  million 

ecu.  It has  61 advisory  members who pay  100 ecu per  annum.  It 

makes  loans to distributors  for one half  the  budgeted 

distribution  costs which  include marketing, copies, dubbing 

etc.  The criteria  for making  loans are  exclusively 

quantitative.  Distributors  from  3 different  countries must. 
aPPlyr  and preference  is given  to  films  from  countries  with  low 
production  and  to countries with  low distribution  capacity.  Of 

the total  funds  40 percent  are given  to  films with  budgets 

below 0.7  million  ecu.  Loans  are  repayable  after  distributors' 

investment  and  30 percent  overheads  have been  covered  by  box 

office  takings.  An  additional  sum of up to  10 percent  of  the 

loan is also payable  if  the distributors  go  into overall  profit. 

The project  has been  operating  for  18 months.  Loans  have  been 

made to  107 distributors  for  25  films.  Six months  after  the 

first  loans had  been made  the  supported  films had  been  seen  by 

an audience of  1.3  million.  By  the present  time, the  audience 

is estimated  at  5 million.  Up  to the middle of  1989  there  had 

been a return  cash  flow  from  the  distributors  of  0.24  million 

ecu. We have been given  no  later  figures. 

The Report of the Assises  Européennes de  l'Audiovisuel  (the: 

Assises)  (p 130) acknowledged  the action  taken by  EFDO  to 

promote European works within  and  outside  Europe  and  hoped  that 

it would  be sustained  and  strengthened. 

We are convinced  that  the value  of EFDO to the  European 
industry has already  been  established.  We  recommend  that  its 

~5<r 

loan  fund  should  be  substantially  increased  so that  it can  make 

a more significant  impact on  the distribution  of  European 

films.  The  total  annual production  of  films  in the  Community 

with budgets  below  2.25  million  ecu  is about  500.  In  the  past 

EFDO has had more  applicants  for loan  funds than  it  could 

satisfy. 

We take the view  that EFDO  should  raise  its  limit on  production 

budgets  to  3 million  ecu, with  the exception of  European 

co-productions  where  a  limit  of  4 million  ecu might  be 

suitable.  The  present  limit of  2.25 million  ecu  is too  low  for 

many  of the  films  that have  some chance  of  success.  However, 

in order  to take proper account of the countries where  all 

films have  a very  low production  budget, a third  category  of 

low budget with  a corresponding  points  advantage might  be 

introduced. 

We consider  that  the  production  of  films of European  interest 

would  be  stimulated  further  by  including  distribution 

guarantees  (presale)  in  the distributors' budgets  for which 

EFDO can make  loans.  Many  distributors  are  involved  in  the 

production  finance  of  films.  EFDO's  loan  fund  would  obviously 

have  to be  further  increased  substantially  in order  to be  able 

to assume  this  function. 

Furthermore, we would  point  out  that distribution  deals  for 

films nowadays  include  television and  video  rights.  It  seems 

appropriate  to us, therefore, that  such deals  should  be 

supported  by  one  rather  than  several organisations.  An 

amalgamation  of, or  at  least a very close  formal  association 

between, EFDO  and  EVE therefore  seems  indicated  to us, as well 

as the inclusion  of distribution  to television  channels. 

We support EFDO's  intention  of opening  offices  in the  United 

States as well  as  their  efforts  to include  East  European 

countries  in their  organisation. 

-S2 

Finally, we wish  to  stress  the  need  for EFDO and EURIMAGES  to 

come  to an agreement  regarding  their  present and  future 

activities.  As  things  staid, there  is a danger  of a 

duplication  or  competition  which  may  not be  in the  interest  of 

the European  public. 

4.  European  Script  Fund 

The object of  the European  Script  Fund  is to stimulate  the 

preparation  of  development  packages  for across-border  fiction 

projects.  This  includes  script, production  budget, business 

plan etc.  A  novel method  of  selection  has been  developed. 

Judgements  are made on  the basis  of  treatments  - not of 

scripts - taking  into  account  the  characteristics  of  each 

country.  Loans  amounting  to one  half  of  the development  costs 

are awarded  to  applicants  who  submit  treatments with  a strong 

story  line, good  production  potential, and  likely  appeal  to 

European  audiences.  The  Fund  has  received  over  1100 

applications  in  the  first  year  of  operation  and  has  awarded  83 

loans  totalling  some  1.7  million  ecu  so  far.  Loans  are 

repayable when  production  starts  plus  15% per  annum  commission. 

One half of  the  administration  budget  of  about  0.45  million  ecu 

is provided  by  British  industry,  the other  half  by  the  European 

Commission.  Non-EC  countries  are  preparing  to  join  the  Find  by 

contributing  to both  administration  and  loan accounts. 

Switzerland  has  recently  jcined  the  Fund; Au.stria has  applied. 

The Assises  gave  "unqualified  support  to  the  following  proposed 

extensions  of  the  Fund:  adding  the  responsibility  for 

(creative) documentary  productions  and  arts programmes; 

extending  the geographic  range  to  all  countries willing  to 

contribute, providing  essential  support  to writers, directors 

and producers  during  script  development  and  pre-production  and 

adding  responsibility  for  incentive  funding  of  production 

companies"  (p 6 8 ).  Further,  "the  initiative  of  the Fund  is 

-53-

considered  to have  achieved  undeniably  positive  results.  Its 

effectiveness can  be extended  only  on  the express  condition 

that  the  financial  resources  are  increased.  The  Fund  has 

provided  a not  inconsiderable  launch  for  screen writing  for 

such countries  as  Portugal, Ireland, Greece  and  Denmark." 

The Committee  welcomes  the objects  of  the  Fund;  our  enquiries 

have shown  that  its  selections  have been  recognised  as wicls 

ranging  and  realistic.  The work  of  the  Fund  can  only  be  fully 

evaluated  after  it has existed  for a number of years, but we 

conclude  that  it is performing  a very  valuable  function  in  the 

development  area  of European  fiction.  In order  for the  Fund  to 

achieve  this  and  in order  for  it  to make  sufficient  impact on 

the  level of quality,  and  on  the  range of choice, available  to 

investors  in European  fiction  over  a period  of  five  years, we 

consider  that  the  Fund  should  concern  itself  increasingly  with 

bringing  the projects  it hoj; helped  to develop  up  to the 

production  stage.  We  recommend .that the  Fund's  financial 

resources  should  be  increased  substantially. 

As  for the Fund's mode  of  operation, wc  endorse  the practice  of 

selection  by  2 or  3 people  backed  up by  advisors, but  recommend 

that  there  should  be  a chancie  in  the  selectors  every  3 years. 

Amongst  the various  aspects  of  fiction  already  covered  by  the 

Fund we wish  to place  specicl  emphasis  on  the development  of 

television  series  and  serials, where  Europe? is especially  weak, 
and on the collective  writing  of  such projects. 

-bh-

5. 

EAVE - European  Audio-visual  Entrepreneurs 

This project commenced  operations  in June  1988.  Its object  is 

to train entrepreneurs  in the  audio-visual  industry.  Using 

national organisers  as  selectors  of  applicants  it has an  intake 

of about  20 participants  and  20 observers  a year.  They tcike 

part  in, and  observe, respectively  the  comprehensive  review  by 

experts of  the projects brought  by  the participants.  These 

progressive  reviews  are held  throughout  one year  at 3 one-week 

residential courses. 

The project  has  an  annual  turnover  of  about  1 million  ecu. 

MEDIA  92 contributes  0.325 million  ecu, French  and  Belgian 

ministries  and  the  Brussels  film  school  together  about  the  same 

amount and  0.2  million  ecu  are  contributed  by  the  participants 

and observers.  As  an extension, business  seminars are  planned 

in Spain. 

The Assises, on page  130, acknowledged  the action  taken  by  EAVE 

and  expressed  the  hope  that  the  initiative will be  sustained 

and  strengthened. 

We have  studied  the  literature  put  out  by  the project  and  the 

extension  of  the project  proposed  quite  recently  by the ME:DIA 

92 Programme.  EAVE  argues  that  its courses  are a  significant 

addition  to the work  of  the  national  schools, by making  young 

entrepreneurs  more  familiar  with  the  realities  of  the market 

place, and  encouraging  associations  between  entrepreneurs'* from 

different  countries.  We  support  this  objective  but we  see  two 

risks: of duplicating  work  already  done  effectively  in the 

various national  film  and  television  schools, and of 

over-specialising,  separating  creative  and  managerial 

disciplines. 

MEDIA  92's initiatives  should  concentrate  on  teaching  media 

professionals  how  to  co-produce  in Europe  and  instructing 

managers who want  to become  active  in  the media  in the 

- &-

essential characteristics of the industry.  We judge there is a 
place for EAVE, provided  it brings together all professional 
disciplines, and concentrates its courses on those relatively 
inexperienced  in the audio-visual  industry.  Alongside this, 
MEDIA 92 should help to promote the expansion of advanced 
teaching based on the already existing film and television 
schools combined  in the European CILECT.  We recommend  that the 
cost effectiveness of the- EAVE project should be reviewed, that 
a time-table be developed  for making the project 
self-financing, and that MEDIA  92 should take note of the fact 
that the inter-disciplinary  nature of this particular project, 
and its geographical spread, require sensitive and effective 
management. 

6.  CARTOON 

This project has been operating  for 2 years.  It is primarily 
designed  to encourage European co-operation  in the production 
of animation programmes  and the industrialisation  of studios. 
Two groups of studios have oeen formed, 2 more are about to be 
formed, and  several others are in the negotiating  stages. 
CARTOON is also helping to develop a European training  scheme 
for animators as part of a 3-year emergency plan.  Furthermore 
the project helps to develop scripts for animation  programmes 
using an adapted  form of th«* one used by the European Script 
Fund.  The making of pilots is also supported. 

t 

The project has an annual administration  budget of 0.25 million 
ecu provided as to 40 percent by the European Commission.  The 
cost of encouraging co-operation, - including  the preparation 
of a 'technical bible' -  has been 0.1 million ecu per annum on 
average from MEDIA  92 funds, far less than the amount invested 
by the studios themselves;  the turnover of the 2 newly formed 
groups for current productions  is anticipated  to amount to a 
total of 38 million ecu in 2 to 3 years.  0.1 million ecu have 
been contributed  from MEDIA  92 funds to the training scheme, 

-y* -

about 20 percent of its total cost.  About  0.5 million ecu out 
of MEDIA funds has been provided as loans for the development 
of scripts for 23 projects out of 84 applications in 2 years. 
This represents.some 20 percent of the full development costs. 
Scripts are selected .by a committee of five experts.  The 
developed scripts are estimated  to generate a total production 
budget of 25 million ecu in the next 3 years.  In 1990, 0.15 
million ecu will be available from MEDIA 92 as conditional 
loans for making pilots as part of pre-production, representing 
some 25 percent  of the cost. 

The Assises expressed  support  for the work of CARTOON  in the 
area of the training of trainers  (p 68). 

We are conscious that, on tae one hand, animation  lends itself 
admirably  to be a pan-European project, and that on the other 
hand, the European  industry  is particularly  weak  in this area. 
We are impressed  very favourably with the achievements of the 
project so far, and strongly  favour its further development. 
We welcome the project's intention  to encourage state-of-
the-art technologies  in this field. 

We consider that the project  is underfunded, not least because 
we feel that in this project, above all, MEDIA  92 can help to 
promote a highly desirable «expansion into eastern Europe, where 
animation has reached  a higii artistic and technical  standard. 
We recommend  therefore that the project  should have 
substantially  increased  funding. 

s*~ 

7. 

Media  Investment  Club 

The Media  Investment Club of  10 members  including  MEDIA  92  is 

just over a year  old.  The other members  are  industrialists, 

financial establishments, communications  groups, and  television 

companies.  The  Club exists  to  stimulate  the use of  advanced 

technology  in audio-visual  productions  and  it  is also  concerned 

with  training,  information, and  export  in the same area. 

It is intended  to  recruit- additional members  to  the Club, the 

medium  term  aim  being  to have  50 members, 30 of which  will  be 

small to medium  sized  companies.  This will make  it easier  for 

the Club to raise  its  share of  the  investment  in  appropriate 

projects.  The Club  also  intends  to become  active  in  initiating 

new projects. 

The Club has  an  administrative  budget  of  0.44  million  ecu, half 

of which  comes  from  the EC.  Its  investment  budget was  about 

0.9  million  ecu  last year; this  year  it will be  0.46  million 

ecu.  It is  intended  that MEDIA  92 will  continue  to match  the 

membership  fees paid  by  the other  members.  Projects  are 

selected  by  a committee  of  6 professionals  in the  fields  of 

production, engineering,  industry  and  finance.  We  recommend 

that  someone with  editorial  experience  should  be  included. 

Applications  are  judged  for  innovation, content, and  potential 

for earning  a profit; projects  can be supported  only  if  they 

are  sponsored  by  at  least  2 members  from  different  countries. 

Nearly  0.6  million  ecu have  been  spent  so  far  for  7 projects 

out of 76 submitted.  The  remaining  applications  were  judged 

not to satisfy  the  conditions  of  the Club.  In  5 of  the 

projects  in which  the Club  is  looking  for a return  on 

investment  it acted  as co-producer.  The Club  forecasts  that 

some of its projects will  be outstandingly  successful. 

-s  3-

The Club has also  subsidised  the training  of new creators with 

about 0.1  million  ecu. 

The new technologies working  party of the Assises  regarded  the 

MEDIA  Investment Club as providing  the basis  for a  solid 

experiment. 

We were concerned  initially  about  two aspects of this project: 

1.  the  relatively  small membership  fee paid  by  each  of  the 

Club's  large  enterprises; the  small  sums collected  in this way 

cannot affect  the development  of  the technologies. 

2.  why, when  all  the companies  involved  were quite  large, 

MEDIA  9 2 should  be  needed  a:s a member. 

We were persuaded  to  look  a*: the present  situation  as part of a 

medium  term  strategy  which  aims  at strengthening  the  smaller 

and medium  sized  units  of  the industry.  In  this  light we  have 

accepted  that  the  Club has needed  both  the  larger  organisations 

and  the  initiative  and  participation  of MEDIA  92  for  its 

inception, and  that  it will  continue  to need  the  participation 

of MEDIA  92  for  reaching  its medium  term goal.  We  came  to the 

conclusion, on  the other  hand, that  the  level of  financial 

participation  in  the  future  should  be reviewed.  We were  also 

satisfied  that  the Club  represented  a useful  forum  in which 

production  and  industrial  developments  could  be  discussed 

between  producers  and manufacturers  and  between  different 

levels of  industry. 

-S"? 

8.  Media  Venture 

This scheme  is expected  to  start up  in a  few months  time  under 

Luxembourg  law and  taxation  and  is not yet  fully  defined.  Its 

capital  is expected  to be batween  25 and  50 million  ecu, v*ith 2 

million ecu  coming  from MEDIA  92.  None  of  the  associates  will 

hold more  than  10 percent  of  the capital  assets.  A number  of 

investors were  said  to have declared  their  interest  in  the 

scheme; full claritv  regarding  individual  investors could  not 

be reached  in the  time  available  to the  committee. 

Media Venture will  invest primarily  in  high-budget  European 

films and prestige  television  series with  a good  commercial 

potential  and  in their  distribution.  They  will  seek  to be 

involved  in co-productions  between  European  and  US producers. 

It is anticipated  that  the  investment will  be concentrated  on 

works costing  at  least  7 million  ecu  to produce.  The  Committee 

were told  that Media  Venture» would  not be  able  to buy  the 

producers'  rights, as  they  were  precluded  from  doing  so if  they 

wanted  to take  advantage  of the  Luxembourg  tax  laws.  This 

avenue, however, would  be available  to other  financiers. 

Projects will  be  selected  for  financing  by  a subsidiary  of 

Media Venture  called  Media  Venture  Conseil  consisting  of  2 or 3 

permanent  staff  and  a network  of advisors. 

Studies  have  been  undertaken  of  all European  film  and 

< 

television markets  from both  the  legal  and  financial  aspects. 

The report  of  these  studies  has  not yet  been  published  but a 

list of the participants  has: been  supplied. 

The Committee  has  some  difficulty  in commenting  on  a  structure 

that is not  fully  defined.  Films  budgetted  at more  than 

7 million  ecu  should,  in our view,  stand  or  fall  as  commercial 

ventures.  MEDIA  92*s participation  is relatively  small, and  we 

-t>Ù~ 

do not believe  should  be necessary.  We  recommend  that MEDIA  92 

should  not continue  to be  involved  in this operation. 

9.  EURO-AIM 

Euro-Aim, which  has been  in operation  for  2 years, is a  support 

structure providing  a range of  services  to assist  independent 

producers  in the marketing, promotion, and  sales of  their 

productions.  It  facilitates  producers'  attendance  at  existing 

media  trade  fairs by  creating  large-scale  "umbrella"  exhibition 

stands.  This  is complemented  by new marketing  initiatives  and 

by  its data  bank.  Euro-Aim  selects the companies  it supports, 

giving priority  to companies  new  to markets, less  experienced 

companies, and  those  that aire judged  to be original  and 

creative.  To  finance  its  1M89  activities, 1989  Euro-Aim 

received  1 million  ecu  from MEDIA  92 and  a total  of  2.4  million 

ecu  from other  public  and  private  sources.  Euro-Aim  calculate 

that they  have  assisted  European  independent  producers  to  sell 

nearly  2000 hours  of  programmes  representing  sales  of  13 

million  ecu.  Over  150 buyers -  including  some  from  overseas  -

have requested  searches  from  the database  representing  some 

30,000 data  sheets  being  distributed. 

The Assises  (p 130) acknowledged  the action  taken  by  Euro-Aim 

and expressed  the hope  that  the  initiative will  be  sustained 

and  strengthened. 

/ 

Euro-Aim  is launching  a new database  to help  European  producers 

find European  co-producers.  Euro-Aim  is also  starting  to  offer 

a year-round,  free marketing  and  distribution  consulting 

service  to European  independent  producers. 

We consider  that  Euro-Aim  - including  its database  -  is a  very 

useful project, which  should  be encouraged  to concentrate  on 

small distributors  and  small  countries.  The project  should  be 

supported, and  particularly  should  seek  to increase  the  level 

of effort devoted  to  selection  and  to  follow-up  the contacts  it 

has helped  to make.  We  suggest  that  this will  require  sone 

increase  in  funding. 

We  feel, however, that  the  project  is now  sufficiently  well 

established  for  it  to charge  producers  a  fee  for  services 

provided, with  the object  of making  it self-financing  in  the 

medium  term. 

10.  BABEL  - Broadcasting  Across  the  Barriers  of  European 

Language 

This  is an assocation  between  MEDIA  92, the  European 

Broadcasting  Union, and  the Alliance  Européenne  pour  la 

Television  et  la Culture.  It grants  aid  for dubbing  and 

subtitling  programmes  to be  broadcast  by  television 

organisations.  Since  October  1988, 27 projects  from  14 

countries  have  been  supported  with  a view  to  60 broadcasts  in 

several  languagues.  In  addition  4 large  multilingual 

broadcasts  with  live  simultaneous  translations  were  broadcast. 

The project  has  an  income  o: 0.22  million  ecu,  0.1  million  ecu 

coming  from MEDIA  92.  The  cost  of  administration  amounting  to 

maybe  30,000 ecu  appears  to be  largely  covered  by  the  EBU.  All 

staff  is part  time.  It  is not  clear whether  the cost  of  staff 

is included  in  the  administration  costs. 

. 

The Assises, while  recognising  BABEL's  positive  results,  saw 

the need  for an  increase  in  its  financial  resources. 

MEDIA  92 intends  to transform  the project: to start  to make 

advances on  receipts  instead  of granting  aid, and  to create  a 

permanent  full time  staff. 

- C l-

We are convinced  that the task of making programmes availcible 
to audiences in the various European languages is one of the 
major problems facing television  in the coming years. 

We support the continuation of BABEL on the revised basis now 
proposed by MEDIA  92.  We recommend  in particular  that its work 
should be extended to encompass the new technologies available 
to maximise multilingual transmissions  (such as new television 
standards and teletext).  An increase in funding  is required. 

-cl-

11. 

EVE- European Video  Area 

The  study phase of  this project  has been completed.  The 

project  is run  in  co-operation  between The  Irish  Film  Board  and 

Médiathèque of Belgium.  It is  intended  by  the  spring  of 1.990 

-  to provide  a  system  of  advances on  receipts  for  videotapes 

when  the  issuer/distributor  is reluctant  to take  the  financial 

risk. 

-  to arrange co-operation  between  existing  European  public 

médiathèques  and  libraries  to encourage  the  issue  of 

video-films  that are  at present  unprofitable. 

It is intended  that  the project  should  have  a  loan  fund  of 
1 million  ecu  and  an  administration  budget  of  0.4  million  ecu 

covering  both  the  Dublin  an! Brussels offices. 

Dublin  is an  interesting  centre  for  a MEDIA  project, but we  had 

difficulty  in  seeing  the  ne=d  for  an  independent  existence  of 

this project, since  distribution deals  nowadays  include  video 

rights  together with  rights  for  film  and  television.  We 

consider  it  should  either  be  incorporated  into  EFDO or  at  least 

work  in very  close  co-operation  with  it.  As  for  the  proposed 

co-operation  between  médiathèques, we  understand  this  already 

exists  and we  are  not  convinced  that  MEDIA  92 need  be  involved. 

-4  4-

12.  Comments  on Matters  Outside  the  Immediate  Remit 

During  our  inquiries  into  the  various  MEDIA  projects,  people  in 

the  film and  television  industries  raised  with  us  certain 

additional  issues  on which  they  argued  that  the  Commission 

could  help  to promote  more  European  co-operation. 

The most  substantial  handicap  for European  co-productions  is 

the different  laws  operating  within  the  audio-visual  supporting 

systems, covering  such matters  as copyright,  financing,  trade 

procedures, technical  standards, quotas  etc.  Many  in  the 

industry  believe  - and  we  agree  - that  as a  first priority,  the 

EC should work  towards  harmDnising  the  different  laws  and 

systems  in order  to establish  the  best  possible  climate  for 

European  co-productions. 

Film makers  and  those  responsible  for  helping  the  growth  of a 

European  film  industry  urge  that  the  Commission  should 

encourage  cinema  exhibition:? by  ruling  that  cinema  seats  should 

be taxed  at  the  lowest  rate  of VAT.  The  film  industry  argues 

that  it is  in  the  cinema  that  their  products  are  tested,  and 

that  it  is on  its  showing  in  a cinema  that  a  film  establishes 

itself  in the video  and  television market  place. 

We appreciate  that  these matters  lie  outside  our  terms  of 

reference, but we  feel  that  there  is considerable  force  in  them 

and  that given  the wish  of  the Commission  to  support  a 

distinctive  European  audio-visual  industry, we  should  mention 

them  in this report. 

One  issue on which  we were not  asked  to  comment  but  of which  we 

became  aware  is the  geographical  spread  of  the  individual  MEDIA 

projects.  As we  see  it, concentrating  the projects  in one  or 

two centres  could  be  cost  effective  and  encourage  interaction 

'(,&-

between them.  If, on the other hand, it is felt desirable for 
Community  reasons that the projects should be spread widely, 
then we must point out that at present several are based in 
Brussels, and of the rest, not one is situated  south of the 
latitude of Geneva. 

We hope, in any case, that individual member  states will not 
seek to extract  strict proportional quotas  from the MEDIA 92 
funding.  Apart  from the practical difficulty of achieving 
this, we believe that MEDIA  92's role, in addition to 
stimulating the European, industry as a whole, is to give 
particular  support to the  smaller countries, and regions, and 
particularly  those with low production.  In the medium term, on 
the other hand, such targeted assistance will benefit the 
industry right across the Community. 

- u 

13.  EPILOGUE 

Subject  to our  reservations: about  certain  individual  projects, 

it is our  judgement  that MEDIA  92 has  fully  demonstrated  that a 

five year  action  programme  would  make  a major  contribution 

towards developing  a European  audio-visual  industry  which  would 

offer a distinctive  European  perspective  on  the  Community's 

screens, and would  be more  internationally  competitive  and, by 

no means  least, would  strengthen  the  film  and  television 

industries  in  the  smaller  ctnd less prosperous  areas  of  the 

Community. 

We also believe  that  several  of  the MEDIA  92 projects  - EFDO, 

ESF and  CARTOON  - could  be  powerful  instruments  in  developing 

co-operation  between  the members  of  the Community  and  what  we 

may  hopefully  describe  as  the  newly  re-emerging  democracies  of 

Eastern  Europe.  If  the Community's  action  programme  is 

implemented,  is  it  fanciful  to  speculate  that  by  the  end  of  its 

five year  term  MEDIA  92 micht  be providing  an  umbrella  for 

audio-visual  co-operation  from  the Atlantic  to  the  Urals? 

Sir  Ian  Trethowan 

March  1990 

ISSN 0254-1475 

COM (90)  132 final 

DOCUMENTS 

EN 

16 

Catalogue number : CB-CO-9Û-190-EN-C 

ISBN 92-77-59855-7 

Office  for Official  Publications of the European Communities 
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